ar-2019.pdf - 7-Eleven Malaysia

7-Eleven M

alaysia Ho

lding

s Berhad

201301028701 (1058531-W) annual rep

ort 2019

To be the best retailer of convenience

Menjadi peruncit serbaneka yang terbaik

VISION

lTo consistently serve the changing needs of customers for their convenience

Memberi layanan secara konsisten mengikut perubahan keperluan semasa pelanggan demi keselesaan mereka

MISSION

VALUES

We seek to understand the needs of stakeholders & the company to make the best (balanced) decisions

Kami berusaha untuk memahami keperluan pelbagai pihak & juga pihak syarikat dalam membuat keputusan yang seimbang dan terbaik

Kami berusaha memudahkan setiap perkara untuk setiap pihak bagi mendapatkan penyelesaian yang terbaik

Kami sentiasa mencari jalan penyelesaian untuk memberi manfaat kepada semua pihak

Kami berkomunikasi secara berkesan untuk memaklumkan kepada semua pihak mengenai perkembangan terkini

We work towards making things convenient for people to increase the effectiveness of our solutions

We find ways to resolve issues that prevents us from delivering value to those we serve

We communicate to manage people’s expectations in the most effective manner

2 Overview

3 Company Profile

5 Corporate Information

6 Board of Directors

8 Profile of Directors

12 Profile of Key Senior Management

13 Management Discussion and Analysis

16 Corporate Structure

17 Community Engagement

20 Milestones & Awards

24 Sustainability Statement

53 Group Financial Summary

54 Group Financial Highlights

55 Corporate Governance Overview Statement

67 Statement on Risk Management and Internal Control

70 Audit Committee Report

73 Directors’ Responsibility Statement on Preparation of Annual Financial Statements

74 Financial Statements

182 List of Properties

185 Additional Compliance Information

187 Statistics of Shareholdings

190 Notice of 7th Annual General Meeting

Form of Proxy

CONTENTS

2 7-Eleven Malaysia Holdings Berhad 201301028701 (1058531-W) • Annual Report 2019

7-Eleven Malaysia Holdings Berhad through its subsidiary 7-Eleven Malaysia Sdn. Bhd. is the owner and operator of 7-Eleven stores in Malaysia. Incorporated on 4 June 1984, 7-Eleven Malaysia has made its mark in the retailing scene and remained a prominent icon for over 35 years. It is the pioneer and largest 24-hours standalone convenience store operator in Malaysia with 2,411 outlets nationwide and serves close to a million customers daily.

OVERVIEW

7-Eleven Malaysia Holdings Berhad 201301028701 (1058531-W) • Annual Report 2019 3

7-Eleven was founded by J. C. Thompson in

1927 as The Southland Ice Company in Dallas,

Texas. Started as an ice vendor, the company

eventually began offering milk, bread and eggs

on Sundays and evenings when grocery stores

were closed. This new business idea produced

satisfied customers and increased sales,

spawning the precursor of the modern

convenience retail concept.

COMPANY PROFILE


COMPANY PROFILE

The company’s first convenience outlets were known as Tote’m stores since customers “toted” away their purchases, and some even sported genuine Alaskan totem poles in front. In 1946, Tote’m became 7-Eleven to reflect the stores’ new, extended hours - 7 a.m. until 11 p.m., seven days a week. The company’s corporate name was changed from The Southland Corporation to 7-Eleven, Inc. in 1999.

We are the pioneer and the largest 24-hours convenience store operator in Malaysia. Upon achieving its 1,000 mark in stores network, 7-Eleven Malaysia opened its door to local entrepreneurs through its unique franchising program in 2009. We are the first franchisor in the local market to offer existing profit-making stores to franchisees.

7-Eleven stores can be found across bustling commercial districts to serene suburban residential compounds throughout Malaysia, from petrol stations and LRT stations to shopping malls and medical institutions. 7-Eleven is Always There For You.

Each 7-Eleven store carries over 2,200 SKUs, including our proprietary brands Slurpee frozen beverages and Aiskleem™ an exclusive range of soft serve. The variety of products and services available at 7-Eleven include bill payment services (TM, Astro, U Mobile, Syabas and Singer), sale of mobile phone reload cards, IDD/STD, Touch ‘n Go reload service, gift cards (Google Play, SONY and Netflix), online purchases payment service (Razer Cash), e-Wallets acceptance (Touch ‘n Go, Razer Pay and Alipay) photocopying, fax, automated teller machine (ATM) and bulletin board for neighbourhood community notices.

In 2009, 7-Eleven introduced fresh brewed coffee and other hot beverages together with packaged fresh food and bakery for the convenience of customers looking for ready-to-eat hot food. All food items sold in 7-Eleven are certified HALAL and undergo stringent quality control to ensure tastefulness and freshness.


CORPORATE INFORMATION

AUDIT COMMITTEE

Muhammad Lukman Bin Musa @ HussainChairmanIndependent Non-Executive Director

Shalet MarianMemberIndependent Non-Executive Director

Tan Wai FoonMember

Non-Independent Non-Executive Director

REMUNERATION COMMITTEE

Tan Wai FoonChairperson


Muhammad Lukman Bin Musa @ HussainMemberIndependent Non-Executive Director

Shalet MarianMemberIndependent Non-Executive Director

NOMINATING COMMITTEE

Shalet Marian ChairpersonIndependent Non-Executive Director

Tan Wai FoonMember


Muhammad Lukman Bin Musa @ HussainMemberIndependent Non-Executive Director

COMPANY SECRETARIES

See Siew Cheng (SSM PC No. 202008000996) (MAICSA 7011225)

Tia Hwei Ping (SSM PC No. 202008001687) (MAICSA 7057636)

REGISTERED OFFICE

12th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13,46200 Petaling Jaya, Selangor Darul Ehsan Tel. No.: +603 7890 4800Fax No.: +603 7890 4650

HEAD OFFICE

Level 3A, Podium Block,Plaza Berjaya,No. 12, Jalan Imbi,55100 Kuala Lumpur,Wilayah Persekutuan,MalaysiaTel. No.: +603 2142 1136Fax No.: +603 2142 0318Email address:[email protected] address: www.7eleven.com.my

AUDITORS

Ernst & Young PLT Level 23A, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,50490 Kuala Lumpur,Wilayah Persekutuan,MalaysiaTel. No.: +603 7495 8000

SHARE REGISTRAR

Berjaya Registration Services Sdn. Bhd.Lot 10-04A & 10-04B, Level 10, West,Berjaya Times Square,No.1 Jalan Imbi,55100 Kuala Lumpur,Wilayah Persekutuan,MalaysiaTel. No.: +603-2145 0533Fax No.: +603-2145 9702

PRINCIPAL BANKERS

Malayan Banking Berhad AmBank (M) Berhad CIMB Bank BerhadRHB Bank Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities BerhadStock Name : SEMStock Code : 5250

PLACE OF INCORPORATIONAND DOMICILE

Malaysia

BOARD OF DIRECTORS

Tan Sri Dato’ Seri Abdull Hamid Bin Embong

Chairman, Independent Non-Executive Director

Colin George Harvey Executive Director/

Chief Executive Officer

Tan U-MingExecutive Director

Chan Kien SingNon-Independent Non-Executive

Director

Tan Wai Foon Non-Independent Non-Executive

Director

Tsai, Tzung-HanNon-Independent Non-Executive

Director

Muhammad Lukman Bin Musa @ HussainIndependent Non-Executive Director

Puan Sri Datuk Seri Rohani Parkash Binti AbdullahIndependent Non-Executive Director

Shalet MarianIndependent Non-Executive Director


BOARD OF DIRECTORS

TAN U-MINGExecutive Director

COLIN GEORGE HARVEY Executive Director/

Chief Executive Officer

TSAI, TZUNG-HAN Non-Independent Non-Executive

Director

TAN SRI DATO’ SERI ABDULL HAMID BIN EMBONG

Independent Non-Executive Chairman


SHALET MARIAN Independent Non-Executive

Director

TAN WAI FOON (LENA TAN)Non-Independent Non-Executive

Director

PUAN SRI DATUK SERI ROHANI PARKASH BINTI ABDULLAH

Independent Non-Executive Director

CHAN KIEN SINGNon-Independent Non-Executive

Director

MUHAMMAD LUKMAN BIN MUSA @ HUSSAIN

Independent Non-Executive Director


PROFILE OF DIRECTORS

TAN SRI DATO’ SERI ABDULL HAMID BIN EMBONGMale, Aged 70, MalaysianIndependent Non-Executive Chairman

Tan Sri was appointed to our Board as Independent Non-Executive Chairman on 20 July 2016.

Tan Sri finished secondary schooling at the Malay College Kuala Kangsar, Perak. He obtained a Barrister at Law degree at the Lincolns Inn, London and was admitted as an Utter Barrister in 1976.

Tan Sri served in the Judicial and Legal Service and was appointed to various posts including that of a Magistrate, Deputy Public Prosecutor, Legal Advisor and Senior Federal Counsel with the Customs and Excise Department, the Economic Planning Unit (PM Department), Ministry of Land and Regional Development, Treasury, Ministry of Home Affairs and Legal Advisor to the States of Negeri Sembilan and Pahang.

He was appointed a Judicial Commissioner in 1994 and a High Court Judge in 1996. In 2006, he was elevated to the Court of Appeal and in 2009 to the Federal Court Malaysia. He retired from the Bench in February 2016.

Tan Sri also serves on the Board of Ancom Berhad as Independent Non-Executive Director and the Chairman of Zetro Services Sdn. Bhd.

Tan Sri has also been appointed as a Judge of the Syariah Court of Appeal, Perak on 1 March 2017.

TAN U-MINGMale, Aged 33, MalaysianExecutive DirectorKey Senior Management

Mr. Tan U-Ming was appointed to our Board as Executive Director on 21 August 2013.

He studied in Irvine Valley College, California, US. He attended the franchisee and in-store training courses with 7-Eleven USA in North America and has completed Phase I of Field Consultant Certification Training in Dallas, Texas, US.

In 2008, he was appointed as a Director of 7-Eleven Malaysia Sdn. Bhd. where he was responsible for overseeing merchandising, logistics and distribution as well as procurement and advertising and promotions functions of 7-Eleven Malaysia Sdn. Bhd. In January 2011, he was promoted to the position of Executive Director of 7-Eleven Malaysia Sdn. Bhd.

Currently, he is an Executive Director of Sports Toto Malaysia Sdn. Bhd. and a Director of MOL Global Pte. Ltd. He also holds directorships in several other private companies.

He is the son of Tan Sri Dato’ Seri Vincent Tan Chee Yioun, who is a major shareholder of the Company.

COLIN GEORGE HARVEYMale, Aged 49, BritishExecutive Director/Chief Executive Officer (“CEO”)Key Senior Management

Mr. Colin George Harvey was appointed to our Board as Non-Independent Executive Director and Chief Executive Officer of 7-Eleven Malaysia on 13 August 2018.

Started his retail career in South Africa where he worked for Africa’s largest retailer Shoprite, holding various commercial and operational roles for 13 years before joining Dairy Farm in Malaysia in 2004, where for a year he managed Dairy Farm’s largest Giant Hypermarket in Johor Bahru, followed up by 3 years as the Head of Dairy Farms Fresh Food commercial team in Kuala Lumpur.

From 2008 to 2011, he was the Commercial director for Pt Hero Supermarket, covering the commercial operation of Dairy Farm’s Indonesian affiliate, encompassing 5 retail formats in Indonesia.

In 2011, he managed Dairy Farm’s - Guardian Indonesia business, restructuring the business, building the support office, supply chain, and restoring the business to profitability until he left in 2017. Prior to his appointment as CEO of 7-Eleven Malaysia, he held the position of independent director of Pharmacity JSC., a Retail Pharmacy leader in Ho Chi Minh City, Vietnam. He has considerable retail experience in South East Asia where he has spent the last 16 years, in various senior roles.

Mr. Colin holds a Bachelor of Commerce Degree from the University of South Africa and an MBA from Stirling University in the UK.



CHAN KIEN SINGMale, Aged 63, Malaysian Non-Independent Non-Executive Director

TAN WAI FOON (LENA TAN)Female, Aged 60, MalaysianNon-Independent Non-Executive Director

Mr. Chan Kien Sing was appointed to our Board first as Executive Director on 21 August 2013, then was redesignated as Non-Independent Non-Executive Director on 22 April 2015.

He is a member of The Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants. Having articled with Messrs. Peat Marwick Mitchell (now known as Messrs. KPMG) from 1975 to 1981, he subsequently joined Arab-Malaysian Merchant Bank Berhad (now known as AmInvestment Bank Berhad) specialising in corporate finance until 1989 when he joined Berjaya Group Berhad.

Currently, he is a Non-Independent Non-Executive Director of Berjaya Corporation Berhad, Berjaya Sports Toto Berhad, Berjaya Assets Berhad and an Executive Director of Berjaya Media Berhad. He also holds directorships in several other private limited companies.

Ms. Tan Wai Foon (Lena Tan) was appointed to our Board as Non-Independent Non-Executive Director on 21 August 2013.

Besides her role in 7-Eleven Malaysia Holdings Berhad, Ms. Tan is also the non-executive Chairman of 7-Eleven Malaysia, non-executive Chairman of Singer (Malaysia) Sdn Bhd, non-executive director of Berjaya Credit Sdn Bhd, Executive Director of Razer Pay Holdings Pte Ltd and Chairman of Upbit Malaysia Sdn Bhd. She also holds directorships in several other private companies.

Ms. Tan has over 30 years of experience in finance, investment, fund management, advisory and stockbroking having worked in New Zealand, Singapore, Hong Kong, London, Paris and Malaysia.

Ms. Tan served as Portfolio Manager at NZI Investment Services in New Zealand and Singapore from 1984 to 1989. She then served as Senior Investment Manager in Indosuez Asia Investment Services Ltd (Hong Kong). Between 1990 to 1998, Ms. Tan served as Director of Sales and Corporate Broking at Peregrine Securities Limited (Hong Kong and London), and Head of Asian Equity Sales at Morgan Grenfell Asia Securities Limited (London). Ms Tan was appointed as Executive Director of K&N Kenanga Sdn Bhd as representative during her role as Country Head of Malaysian Equities Product at Morgan Grenfell Asia Securities Limited (Hong Kong).

Ms. Tan joined Grand Generale Asset Management Limited (GGAM) as Senior Investment Manager in 1998. Subsequently, GGAM merged with Fortis as Fortis Investment Management Asia Limited, where Ms. Tan was promoted as the Director of Research (Asia). In 2002, Ms. Tan was relocated to France where she headed up the Asia Funds and Emerging Market equity research department for Fortis Investment Management France SA in her role as Head of Asia Funds and Coordinator of Emerging Market Equities Research.

Ms. Tan joined Ward Ferry Management Ltd in 2003 as Senior Investment Manager and later founded WMG Asia Limited and where she served as Chief Portfolio Manager and Managing Director from 2006 to 2015.

Ms Tan holds a B.A. in English from the University of Manitoba and MBA in finance from the University of San Francisco (USA).



TSAI, TZUNG-HAN Male, Aged 43, Taiwanese Non-Independent Non-Executive Director

Mr. Tsai, Tzung-Han was appointed to our Board as Non-Independent Non-Executive Director on 16 January 2019.

He obtained his Juris Doctor Degree in law from Georgetown University Law Center, U.S.A. and his Bachelor’s Degree in Economics from Harvard University, U.S.A.

Currently, he is the Vice Chairman of Cathay United Bank, a subsidiary of Cathay Financial Holdings, a publicly listed company in Taiwan. He also serves as a director on the board of Cathay Life Insurance, the largest life insurer in Taiwan and also a subsidiary of Cathay Financial Holdings. After returning from the US in 2005, he served in various capacities at Cathay Life Insurance, including senior vice president in charge of alternative investments and executive vice president in charge of real estate acquisitions and development, human resources and strategic planning. He also ran the strategic planning department for Cathay Financial Holdings from 2010 until 2016 and oversaw the strategic investments into Bank Mayapada in Indonesia, Rizal Commercial Banking Corporation in Philippines and Conning Asset Management in the US. He joined Cathay United Bank in 2015 and served as the Head of Strategic Planning until he became the Vice Chairman in 2016, where he continues to oversee the strategic planning, wealth management, digital banking, data analytics and overseas banking departments.

Prior to returning to Taiwan, Mr. Tsai worked briefly in private equity at Goldman Sachs in New York and in venture capital at Pacific Venture Partners in San Francisco. From 2001 until 2003, he was a practicing attorney in the real estate department at Hale and Dorr LLP, currently known as Wilmer Hale, in Boston.

Mr. Tsai has over ten (10) years’ experience in investment and business development in finance industry.

MUHAMMAD LUKMAN BIN MUSA @ HUSSAIN Male, Aged 44, Malaysian Independent Non-Executive Director

Encik Muhammad Lukman Bin Musa @ Hussain has been an Independent Non-Executive Director of the Company since 21 August 2013.

He commenced his career in 1998 as an external auditor with Andersen & Co (Malaysia). In 2001, he has pursued his career in United Kingdom and his last position in United Kingdom was as the Manager in Banking & Capital Market Division at the London office of Ernst & Young LLP, United Kingdom. Upon his return in 2008, he joined Ernst & Young (Malaysia) as the Audit and Assurance Director, and was responsible in managing various Government Linked and Multinational Companies portfolio. In 2011, he left Ernst & Young (Malaysia) to hold the position as Chief Operating and Chief Financial Officer of Unitar Capital Sdn. Bhd. (UNITAR), the operator of UNITAR International University, and a subsidiary of Ekuiti Nasional Berhad. In June 2016, he left UNITAR and joined MARA Corporation Sdn. Bhd., a strategic investment holding company of Majlis Amanah Rakyat (MARA) as the Chief Financial Officer. In July 2019, he left MARA Corporation Sdn. Bhd. and currently act as an Advisor to ECS Solutions Sdn. Bhd., a boutique management and advisory firm.

He holds a Bachelor in Accountancy Studies from University of Porstmouth. He is also a qualified Chartered Accountant from Malaysian Institute of Accountants (MIA) and is a fellow member of the Institute of Chartered Accountants in England and Wales (ICAEW).

He currently serves on the Board of MBM Resources Berhad.

PUAN SRI DATUK SERI ROHANI PARKASH BINTI ABDULLAH Female, Aged 64, Malaysian Independent Non-Executive Director

Puan Sri was appointed to our Board as Independent Non-Executive Director on 10 February 2017.

She obtained her Master of Business Administration from Oklahoma State University, USA in 1995.

Her career was primarily in the civil service and spanned the land and regional development, communication and multimedia, human resources and higher education sectors. She was extensively involved in international and policy aspects of these sectors and left the government service in 2012 as the Deputy Secretary General of Ministry of Higher Education. She concluded her career in the public sector as a Senior Fellow at University Teknologi Malaysia.

Since mid-2015, Puan Sri has involved herself solely with the corporate sector, as well as her role (mid-2012 to late-2018), as the President of PUSPANITA Kebangsaan (Association of Women Civil Servants and Wives of Civil Servants) which is a charity and volunteer organisation.

Puan Sri currently serves on the Board of Symphony Life Berhad.



Note:- 1. The details of Board Committees held by the

Directors and the number of board meetings attended by them are disclosed in the Corporate Governance Overview Statement.

2. Save as disclosed, none of the Directors have:- • Any other directorship in public

companies and listed issuers; • AnyfamilyrelationshipwithanyDirector

and/or major shareholder; • Any conflict of interest with the

Company; • Any convictions for offences within

the past five (5) years other than traffic offences, if any; and

• Anypublicsanctionorpenaltyimposedby the relevant regulatory bodies during the financial year.

SHALET MARIANFemale, Aged 63, Malaysian Independent Non-Executive Director

Ms. Shalet Marian was appointed to our Board as Independent Non-Executive Chairman on 21 August 2013 and re-designated as Independent Non-Executive Director on 20 July 2016. She also serves on the Audit Committee and Remuneration and Nomination Committees.

She is a member of the Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants.

Ms Shalet Marian’s career as a public accountant with a specialization in tax spanned over 30 years. She has a wealth of experience in finance and risk management. In KPMG Malaysia, she held various senior positions which include Head of Corporate Tax, Head of Indirect Tax, Head of Finance and Administration and Country Risk Manager. In her career she also served as internal auditor of Arab-Malaysian Merchant Bank (now known as AmInvstment Bank Berhad) in 1984. She took an early retirement in 2010 to refresh her skills in people management.

In the field of human and personal development, she is certified in Neuro Linguistic Programming, Lifeline Techniques, Cognitive Behaviour Models and Aubrey Daniels Institute’s certification in behavioural based performance management technologies incorporating Performance Management and Coaching for Rapid Change in Business. In addition, she gained certification in Malaysian Goods and Services Tax (GST) from the Royal Malaysian Customs Department in 2013. She served as Advisor on tax matters that included GST to a firm of consultants between 2011 and 2015. She obtained the Human Resources Development Fund (HRDF) Certification in Training in 2017.

Ms Shalet Marian was appointed to the Board of Directors (“Board”) of Hong Leong Assurance Berhad (“HLA”) on 16 June 2016 and is a member of the Hong Leong Group Board Audit Committee.

Currently she serves as Chief Executive Officer of Lejadi Foundation, a non-profit organization.


PROFILE OF KEY SENIOR MANAGEMENT

COLIN GEORGE HARVEYExecutive Director/Chief Executive Officer

The profile of Mr. Colin George Harvey is set out on page 8 of this Annual Report.

TAN U-MINGExecutive Director

The profile of Mr. Tan U-Ming is set out on page 8 of this Annual Report.

WONG WAI KEONG Male, Aged 46, Malaysian Chief Financial Officer

Mr. Wong Wai Keong was appointed as Chief Financial Officer of the Company on 12 March 2018. He is an experienced financial professional and has over 23 years of working experience in multinational corporations (MNCs) and local environment across the region overseeing finance, accounting, information technology/enterprise resource planning (ERP) and business management. He has worked in various industries including healthcare, multi-level marketing, Enterprise Application services, manufacturing, agriculture and the Fast Moving Consumer Goods industry (FMCG).

He is a member of the Chartered Institute of Management Accountant (CIMA), the Malaysian Institute of Accountants (MIA) and the Chartered Global Management Accountants (CGMA).

Prior to joining 7-Eleven Malaysia Holdings Berhad, he was the Group Finance Director of SyAqua Group Inc. overseeing the Asian markets and Florida, USA where he was involved in the organization expansion and was instrumental in transforming the group into an integrated functional business.

He has previously held management roles in Avon Cosmetics, KFCH Marketing, Ayamas Food Corp, Abbott Laboratories, and Wyeth. He was also a Lead Application Consultant with JD Edwards.

Note:-1. Save as disclosed, none of the Key Senior Management have:-

• Anyotherdirectorshipinpubliccompaniesandlistedissuers;• AnyfamilyrelationshipwithanyDirectorand/ormajorshareholder;• AnyconflictofinterestwiththeCompany;• Anyconvictionsforoffenceswithinthepastfive(5)yearsotherthantrafficoffences,ifany;and• Anypublicsanctionorpenaltyimposedbytherelevantregulatorybodiesduringthefinancialyear.


MANAGEMENT DISCUSSIONAND ANALYSIS

As the largest convenience store operator in Malaysia, 7-Eleven Malaysia Holdings Berhad delivered record performance in its financial year of 2019, in spite of various challenges in the internal and external environment.

In 2019, we focused on refurbishing and refreshing our stores to upkeep the image and true convenience experience across our existing network. We opened 165 new stores in various regions and closed 41 unprofitable stores where the trade areas changed and were no longer economically viable to operate.

In our endeavours to be the best retailer of convenience, we set ourselves to grow our operating income – focusing on our customers while continuously engaging and developing our employees.

Our business strategy

•Improveassortment•Supplychain•Driveoperationalexcellence•Growandimprovestorebase•Digitallyenabletheorganization•Engaginganddevelopingourcolleagues

Improve Assortment

7-Eleven has a legacy in innovation. We were the first to operate 24 hours a day and offer everyone’s favourite frozen beverage, Slurpee®. We will continue to innovate bringing in more differentiated products and services. We have to understand consumer trends and develop high value products and keep our products and offerings exciting and give customers what they want.

Fresh food is the fastest growing segment in our business, yet continues to be underrepresented in our stores. We recognize that it will be an important growth driver that will draw customers in and drive ancillary purchases in the future and therefore we have introduced 255 new fresh food products in 2019 with a growth of 28.7% in the fresh food segment. Going forward, we will continue to invest in product development and improve on our fresh food offer.

The convenience store landscape in Malaysia is highly competitive. Bearing that in mind, we will continue to refresh how our customers view the 7-Eleven brand through our branding, promotions, and the products we offer.

We continue to focus on new and exciting as well as exclusive items.

Supply Chain

Supply chain is the heart of the business and we continue to work on improving efficiencies and optimizing our logistics. Our main focus for supply chain during the year was to ensure consistent fulfilment to the stores and to drive down cost alongside generating a fairer income. We are pleased with our progress in terms of availability, but it is still costing us too much to deliver to our 2,411 stores and renewed focus is needed. We further recognise that additional facilities are required for fresh food and dry grocery and will work towards this.


MANAGEMENT DISCUSSION AND ANALYSIS

Drive Operational Excellence

On a daily basis, more than a million customers walk into our stores. Our customers our reason for being, and we continue to work on our customer service, ensuring we provide the right assistance and a lasting consumer experience. We invested in customer service training programs and monitor this through mystery shopper audits. Store operations and processes are being simplified so that focus can be on improving the execution in customer service, stock replenishments, shelf merchandising. In addition, cost efficiency was also an area of attention by ensuring the reduction of shrinkages and overtime spent. We are proud to have been awarded the Putra Brands Gold award.

Grow and Improve Store Base

It is important to keep our store portfolio updated and as such will continue to refurbish our stores. In the process, we are also exploring new concepts and models as we work on adding new formats and categories.

In our new store opening process, we set up stores based on feasibility of a certain trade area composition and economics. However, they change over the years and may not meet financial performance expectations due to evolution of a particular area. We continue to work on eliminating underperforming stores and improve profitability of the others. Our strength is in our network and as such we will continue to work on growing our stores in the right areas. We seek to go into areas where we are underrepresented and make 7-Eleven accessible to all. We are pleased with a number of stores that we opened in 2019, including new concepts at KLIA 2 and have secured sites in KLIA and at TRX Malaysia’s highest building.

Digitally Enable the Organization

The appointment of several Digital Professionals in 2019 showed our commitment to digitalising our business. Initiatives included switching to android hand held devices instore, a digital maintenance reporting system, and the beginnings of a Human Resource Information System (HRIS). We further engaged AWS to move our Data Centre to Cloud and expect to complete this in 2020. We continue to review our digital strategy and investments as we strive to understand our customers better and employ the latest technologies to meet their needs.

Engaging and developing our colleagues

2019 was a year where we saw a number of key hires join the organisation, Head of Merchandising, Chief Digital Officer, a new head of franchising to name a few. At the same time we made considerable effort to develop our people by way of On the Job Training (OJT), formal programmes, seminars and leveraged the 7 Eleven network by using programs develop in the USA and Japan, and also by sending a number of colleagues to Japan, Taiwan, Thailand to understand best practices.

Financial Performance

Revenue

The Group’s revenue for the financial year ended 31 December 2019, increased by RM144.0 million or 6.5% to RM2.36 billion compared to revenue in the previous financial year of RM2.22 billion. The growth in revenue was driven by the growth in new stores, improvement in same store sales and consumer promotion activities.

In 2019, we opened 165 new stores and closed 41 stores, contributing to a net increase of 124 stores which bring us to a total of 2,411 stores.

Revenue from fresh food segment is now above 4.0% of total revenue which grew 28.7% against the preceding financial year.

Gross Profit and Gross Profit Margin

Gross profit improved by RM41.8 million or 6.0% compared to the previous financial year driven by revenue growth of 6.5%, favourable sales mix and improved logistics expenses recovery.

Other Operating Income

Other operating income increased by RM20.4 million or 16.6% as compared to the previous financial year. The growth was primarily contributed by the increase in our marketing income.

Selling and Distribution Expenses

Selling and distribution expenses increased by RM3.0 million or 0.5% year-on-year, mainly driven by higher staff cost, utilities and store depreciation expense which are mostly in tandem with new store expansion but partially offset by lower inventory shrinkages, and effect of adoption of MFRS 16: Leases resulting in higher depreciation expenses and lower rental expenses.

Administration and Other Operating Expenses

Administrative and other operating expenses increased by RM22.6 million or 23.9% against the previous financial year due to higher staff cost, impairment loss on receivables, maintenance expenses, and provision for restoration cost.

Finance Cost

Finance cost for the current financial year has increased by RM33.7 million or 340.0% compared to the previous financial year. This was mainly attributed to the adoption of MFRS 16: Leases which had increased the finance cost by RM35.8 million, partially offset by lower finance cost from lower utilisation of bankers’ acceptance and revolving credit facilities.


MANAGEMENT DISCUSSION AND ANALYSIS

Profit after Tax

The profit after tax for the financial year 2019 was RM54.1 million compared to the RM51.3 million recorded for the previous financial year, improved by RM2.8 million or 5.5% year-on-year. The adoption of MFRS 16: Leases (effective 1 January 2019) had reduced the profit after tax by RM8.4 million. Excluding MFRS 16: leases, the Group would have achieved a profit after of RM62.5 million which is an increase of RM11.2 million or 21.8% year-on-year attributed to overall improvement in revenue and operational financial performance.

Liquidity and Financial Resources

As at 31st December 2019, the Group retained cash and bank balances of RM96.2 million after cash dividend payment for financial year 2018 of RM27.1 million.

The Group has total borrowings of RM149.4 million as at 31st December 2019. The borrowings comprise of bankers’ acceptance, revolving credit and term loan facilities which were utilized for funding working capital and capital expenditures for new stores and refurbishments. Despite utilisation of the said borrowings, the net gearing ratio of the Group as at 31st December 2019 improved to 0.23 times compared to 0.39 times in the preceding financial year. Operating cash flows generated at the end of financial year 2019 was RM309.9 million.

Prospects

Outlook for 2020

As we write this, we are operating under the Movement Control Order due to the pandemic outbreak of Covid-19. The Country and indeed the World will be affected by this massive event for some time to come. It is these difficult times that we note the true asset of 7 Eleven, the asset that makes sure that we as a company stand by our tagline, ” Always There for You” We cannot think that there has been a time in history where this was put to test more than right now. The asset that we speak of is our 7 Eleven colleagues, every single one that has been working on split shifts to ensure payroll is met, stakeholders paid, and our customers the ability to top up on their essential needs. It is indeed remarkable that in these times colleagues still found time to donate to the less fortunate, to front-liners and those in need such as local hospitals, welfare homes and more. The board of directors is humbled by their sense of responsibility and their efforts. Our sincere thanks to them all.


CORPORATE STRUCTUREas at 30 April 2020

Our Group structure is set out below:

7-Eleven Malaysia Holdings Berhad

100% 7-Eleven Malaysia Sdn. Bhd.

46.5%

Dego Malaysia Sdn. Bhd. (Formerly known as Myinteractivelab Sdn. Bhd.)

100% Teluk Juara Sdn. Bhd.

100% 7 Properties Sdn. Bhd.

60% Café Decoral Sdn. Bhd.

100%Convenience Shopping (Sabah) Sdn. Bhd.

70% Caring Evergreen Sdn. Bhd.

75.5%Ace Caring Pharmacy Sdn. Bhd.

90% Caring Belle Sdn. Bhd.

60%Caring “N” You Pharmacy Sdn. Bhd.

59.5% Caring Empire Sdn. Bhd.

51% Be Caring Sdn. Bhd.

60% Caring Clover Sdn. Bhd.

60% Caring Alliance Sdn. Bhd.

100% Caring Estore Sdn. Bhd.

87.8% Caring Health Solutions Sdn. Bhd.

60% Caring Pharmacy (Ampang) Sdn. Bhd.

60% Caring Link Sdn. Bhd.

60%Caring Pharmacy (JB Molek) Sdn. Bhd.

75% Caring Healthmark Sdn. Bhd.

51% Caring Pharmacy (IDR) Sdn. Bhd.

75% Caring Pharmacy (ABM) Sdn. Bhd.

100%Caring Pharmacy (Kinrara) Sdn. Bhd.

80% Caring Pharmacy (KLP) Sdn. Bhd.

70% Caring Pharmacy (SK) Sdn. Bhd.

60%Caring Pharmacy Paradise Sdn. Bhd.

100% Caring Pharmacy (RS) Sdn. Bhd.

70% Caring Pharmacy Always Sdn. Bhd.

60% Caring Pharmacy (MPLS) Sdn. Bhd.

51% Caring Pharmacy (SW) Sdn. Bhd.

60% Caring Pharmacy Rising Sdn. Bhd.

85%Caring Pharmacy (Shah Alam) Sdn. Bhd.

60% Caring Pharmacy Ascend Sdn. Bhd.

60%My Caring Pharmacy Sdn. Bhd.

100% Caring Pharmacy Sdn. Bhd.

51% Sterling Pharmacy Sdn. Bhd.

75% Cosy Vision Sdn. Bhd.

60% Viva Caring Sdn. Bhd.

60% Mega Caring Sdn. Bhd.

70%Preciouslife Pharmacy Sdn. Bhd.

59.5% Caring Trinity Sdn. Bhd.

51% Vertex Pharmacy Sdn. Bhd.

60% Green Surge Sdn. Bhd.

60%One Caring Pharmacy Sdn. Bhd.

60% Caring T & T Sdn. Bhd.

60% Tonic Pharma Sdn. Bhd.

86.7% Fuji Acre Sdn. Bhd.

80%WM Caring Pharmacy Sdn. Bhd.

60% MN Pharmacy Sdn. Bhd.

90% Stay Caring Sdn. Bhd.

59.5% Caring Trio Sdn. Bhd.

70% Victorie Caring Sdn. Bhd.

100% Living Glory Sdn. Bhd.

100%Caring Pharmacy Retail Management Sdn.Bhd

73.7% Caring Pharmacy Group Berhad


COMMUNITY ENGAGEMENT

2019 JAN2019

MAC2019

FEB2019

MAC2019

APR2019

MAC2019

MAY2019

Grace Home Klang

Bukit Tagar Sanitary Landfill Pusat Jagaan Siti Nor Aini

Armed Forced Football Club (AFFC) Pusat Penjagaan Kanak-Kanak Cacat Klang, Selangor

Outreach to Pasir Gudang Victims

En Yuan Old Folk Home



2019 JUN2019

JUL2019

JUN2019

JUL2019

AUG2019

AUG2019

AUG2019

Sponsorship of Kelab Ragbi SMK Tinggi Batu Pahat

Living Hope

Happy Neighbourhood

Pusat Jagaan Nuri

World Stats Run 2019 Unseen Tour KL

Outreach to Sungai Isap,Pahang Victims



DEC2019

Rumah Chrestus

Laksamana Run 2019

2019 SEPT2019

NOV2019

OCT2019

NOV2019

Persatuan Kebajikan SVM Selangor

PAKATS Larian 9 to 5 Marathon

Malaysia Haze Relief

DEC2019


MILESTONES & AWARDS

2019 JAN2019

APR2019

JAN2019

MAC2019

MAY2019

FEB2019

FEB2019

MAY2019

MAY2019

Huat Ah CNY Giveaway Jom Riuh Contest

6th Annual General Meeting Music is a Gift Contest

MOU Exchange Ceremony - PERHEBAT

Launch of Jom Borong Promotions

B Infinite Awe-mazing 3reats

Mickey Go Local Tins

2323rd Plaza Arkadia Store Launch


MILESTONES & AWARDS

2019 JUN2019

JUL2019

JUN2019

JUL2019

JUN2019

Semurni Kasih CampaignPay with Razer Pay Win

A Proton Iriz

Launch of 7-Eleven Thematic Lighter Launch of Crazy Wednesday

JUL2019

Pokemon Poke Plates

7-Eleven & Radiant Globaltech B2B Portal

JUL2019

CSR Malaysia Award 2019


MILESTONES & AWARDS

2019

SEPT2019

OCT2019

OCT2019

OCT2019

SEPT2019

AUG2019

AUG2019

Touch’n Go eWallet 247 Cashback

B Infinite Threeple-x For Merdeka

711 Race2Win Contest

Official Launch of Touch’n Go eWallet

Flamin’ Festival

#BuatBaikTogether Campaign 2019

Putra Brand Awards 2019(Gold in Retail Category)


MILESTONES & AWARDS

7-Eleven _ Razer Parcel+Services

2019 OCT2019

OCT2019

NOV2019

NOV2019

Dragons of Asia Awards 2019 Gift Cards Available in East Malaysia

OCT2019

Around the World with We Bare Bears

Thirsty No More

NOV2019

DEC2019

Gift and be GiftedLean In Unconference 2019


ABOUT THIS STATEMENT

This Sustainability Statement marks our third year of annual reporting on the topics that are most material to our stakeholders and to our business. The statement showcases our stewardship in addressing economic, environmental and social opportunities and risks.

As the single largest chain of convenience stores in Malaysia with 2,411 stores across the country, we are cognisant of our role in contributing to the domestic economy and the community that we operate within whilst protecting the environment. Therefore, we endeavour to weave a culture of sustainability across our value chain.

Reporting Approach

The statement has been prepared in reference to the Global Reporting Initiative (“GRI”) Standards: Core Option and the Bursa Malaysia Sustainability Reporting Guide (2nd Edition) issued by Bursa Malaysia Securities Berhad (“Bursa Malaysia”). Under the Core Option, the following GRI indicators have been disclosed:

• GRI102-1to102-4:OrganisationalProfile

• GRI102-18to102-20,102-22to102-23,102-29 and102-32:Governance

• GRI102-40,GRI102-42to102-44: Stakeholder engagement

• GRI102-45to102-47,102-50,102-53 and102-55:ReportingPractice

• GRI102-16and102-17:EthicsandIntegrity

• GRI204ProcurementPractices2018

• GRI302Energy2016

Scope of Reporting (102-3, 102-4, 102-46, 103-1)

Thescopeofthestatementincludesoursubsidiary7-ElevenMalaysiaSdn.Bhd.(“Company”)whichoperatesthechainofstoresthroughout Malaysia as well as our Combined Distribution Centres (“CDC”) at Bandar Bukit Raja, Klang, Store Support Centres (“SSC”) and our corporate headquarters in Kuala Lumpur.

SUSTAINABILITY STATEMENT

Reporting Period (102-50)

Unlessotherwisespecified,thedisclosures in this statement represent activities carried out between1stJanuary2019and31stDecember2019.

Feedback (102-53)

7-Elevenwelcomesourstakeholderstoshare feedbacks and comments with us. Pleasecontactusat:

7-Eleven MalaysiaLevel 3A, Podium Block, Plaza BerjayaNo. 12, Jalan Imbi 55100 Kuala Lumpur, MalaysiaPhone: 03-21421136Fax: 03-21421139

This statement can be downloaded from our website at http://www.7eleven.com.my/.

• GRI305Emission2016

• GRI306EffluentsandWaste2016

• GRI401Employment2016

• GRI403OccupationalHealthandSafety2018

• GRI404TrainingandEducation2016

• GRI405DiversityandEqualOpportunity2016

• GRI413LocalCommunities2016

• GRI416CustomerHealthandSafety2016



SUSTAINABILITY STRATEGY AND FRAMEWORK (102-16) OursustainabilitystrategyisunderpinnedbythreepillarsthataredefinedbyourVisionandMissionstatementsandbuiltonthefoundationofourCoreValues

Vision

Mission

To be the best retailer covenience

To consistently serve the changing needs of customers for their

convenience

7-Eleven Core Values

UnderstandWeseektounderstandtheneedsofstakeholders& the Company to make the best decision

SimplifyWeworktowardsmakingthingsconvenientforthepeople to increase the effectiveness of our solutions

SolveWefindwaystoresolveanyissuesthatpreventsusfrom delivering value to those we serve

ConnectWecommunicatetomanagepeople’sexpectationsin the most effective manner



Our Three Strategic Pillars

Leading by ExampleEncouraginge-commerceandidentifyingwaysto

empower customers and strengthen green consumerism.

Working with OthersBuilding sustainable partnerships with NGOs and other community organisations to strengthen resilience within

vulnerable communities.

Empowering CustomersCommittedtoalong-termprogrammeinvolvingpractical

steps to reduce energy consumption and greenhouse gas emissions.

OUR COMMITMENT TO UNITED NATION SUSTAINABLE DEVELOPMENT GOALS

As a member state of the United Nations, Malaysia is committed towards realising the aspirations of the Sustainability Agenda 2030 and the 17 SustainableDevelopmentGoals (“SDGs”). The EleventhMalaysia Plan (2016-2020) and other governmentpolicies have included the goals and targets of the SDGs to steer the nation towards sustainable development.

At7-Eleven,wearemindfulofourcontributionandhencetheGroupidentifiedandadoptedsixUNSDGsinFY2018.ThisyearSDG13:ClimateActionwasincludedgiventheurgentneedtoaddresstheeffectsofclimatechange.Inthetablebelow,wehavemapped the seven SDGs against our initiatives and targets.

SDGs Related Targets Number Contribution by 7-Eleven

SDG 2: Zero Hunger • Established7-ElevenFoodManufacturingStandardsandPracticestoensure quality and safety of food products.

• ConductannualassessmentonSafe&LegalStandardtoensure7-Elevenoutletsmaintaintheircertificationandqualityoffoodsold.Thisyear,wehaveassessed62.6%outof70%oftotalstoresnationwide.

• TheGrouphasannualproductsurveillancetestinginplacetoaddress critical aspects of safety and quality of food production and processing.

SDG 5: Gender Equality • Ouremployeedistributionisnear-balancedwith48%womenand52%men.

2 ZEROHUNGER

5 GENDEREQUALITY



OUR COMMITMENT TO UNITED NATION SUSTAINABLE DEVELOPMENT GOALS (CONT'D)

SDGs Related Targets Number Contribution by 7-Eleven

SDG 8: Decent Work and Economic Growth

• EstablishedCodeofConduct/Ethics,GiftPolicy,WhistleBlowingPolicyandGrievanceProcedurestoprovideconduciveworkingenvironment for our employees.

• 91%ofourtotalemploymentwerehiredlocallyinMalaysia.• Over82%ofourworkforcehasbeenbelowthe30yearsbracketas

we prioritise employment for young talents. • Investedatotal119,607hoursoftrainingacrossfouremployment

levels,namelySeniorManagement,Management,ExecutivesandNon-Executives.

• Establishedthe7-ElevenMalaysiaSafetyandHealthPolicy,WorkplaceInspectionJotform,7-ElevenCrisisManagementManual(“CMM”)andIncident Investigation Report system to ensure health and safety of employees, customers and visitors throughout our retail operation.

• CollaboratedwiththeArmedForcesEx-ServicemenAffairsCorporation(“PERHEBAT”)toorganisearecruitmentprogrammethataimedtoprovidejobopportunitiesforex-servicemenat7-ElevenMalaysia nationwide.

SDG 9: Industry, Innovation and Infrastructure

• PartneredwiththeRazerParcelPlusthisyeartoofferseamlessshippingserviceatour7-Elevenstoresnationwide.

• Providedanewe-commerceoption:TouchnGoe-Walletforcustomers.

SDG 12: Responsible Consumption and Production

• Monitoredmonthlyrecordsontheamountofrecycledwastefromthestores nationwide.

• Pilotedthe“NoPlasticBag”initiativesatseven(7)ofourstores,bychanging the commercial plastic bags to biodegradable bags.

• Providewoodenstirrerandpaperstrawsinsteadofplasticstirrersandplastic straw at chain stores to minimise plastic footprint.

SDG 13: Climate Action • Averageenergyconsumptioninthemajorityofourstoreswasbetween7and8thousandkWh.

• AchievedasavingsofRM413,000frominstalledenergy-savingdevicessuchasair-conditionersandchillersat314stores.

• Minimisedenergyusewithanaverageof72,855kWhpermonththisyear.

• Achievedatotalreductionof46%or583,830Linfuelconsumptionthis year.

• Achievedcarbonemissionsavingsof1,694tonnesofcarbonemissionduetotheCross-DockDeliverysystemthathasbeenimplemented.

SDG 16: Peace, Justice, and Strong Institutions

• Upholdstrongcorporategovernanceandethicalbusinessconduct.• ConductOperationReviewsandHeadofDepartmentMeetingsonce

a week to report issues faced at work place and ensure perspectives atthemeetingarediverseandcross-represented.

• Weorganised14communityengagementprogrammesbyreachingout406participantsfromvariouscommunitieswiththeinvestmentofmorethanRM300,000thisyear.

9 INDUSTRY, INNOVATION AND INFRASTRUCTURE

12 RESPONSIBLE CONSUMPTION AND PRODUCTION

13 CLIMATE ACTION

16 PEACE, JUSTICE, AND STRONG INSTITUTIONS

8 DECENT WORK AND ECONOMIC GROWTH


SUSTAINABILITY GOVERNANCE (102-18, 102-20, 102-32) A strong governance framework is key to ensuring that sustainability issues are incorporated into our corporate agenda. The Grouphasestablishedathree-tieredstructurewiththeBoardofDirectorsattheapex.TheBoardhasdirectoversightofGroup’soverarching sustainability agenda, strategic decisions as well as champions the sustainability initiatives. Supporting the Board is the Sustainability Committee that comprises representative from seven departments. The Chairman of the Committee is assisted by a Coordinator.

Marketing

Board ofDirectors

Chairman

Sustainability Committee

Coordinator

Human Resources

Supply Chain Maintenance

Fresh Food Services

Franchise and Store

AdministrationProcurement

Roles and Responsibilities

Committee Roles and Responsibilities

Sustainability Chairman • Updating the BOD on the sustainability performance and matters onsustainability reporting

• AssistingtheBODonpoliciesandprojectsregardingthesustainabilityreporting• ChairingSustainabilityCommitteemeetings

Sustainability Coordinator • Coordinating and executing sustainability activities that are in line with thestrategic direction of the Group and its policies

• EngagingtheSustainabilityCommitteeandoverseethesustainabilityinitiativesprogress

Sustainability Committee • Implementing and prioritising sustainability matters that are relevant to theGroup and its Stakeholders

• ExecutingthesustainabilityinitiativesthatareapprovedbytheBOD• Recording and managing data that reflects the Company’s year-on-year

performance against economic, environmental and social sustainability parameters



STAKEHOLDER ENGAGEMENT (102-40. 102-43, 102-44)

The Group believes that it is through a stakeholder-driven approach that we can accelerate sustainability. We value ourpartnerships with numerous stakeholders as a way to not only address our sustainability issues, but to help our partners address their sustainability challenges. By establishing effective and transparent lines of communication with our stakeholders, we aim to addresstheirconcernsinacollaborativemannerthatmeetsboththestakeholders’interestsandtheGroup’svisionforsustainablegrowth.

Stakeholders Areas of Interest Types of EngagementInvestors •Financialperformance

•BusinessStrategy•BursaCompliance

Annual General Meeting (AGM)Analyst/InvestorBriefingsQuarterlyFinancialResultsCompany Announcements

Customers •Productpricingandoffers•Productassortments•Productquality•E-commerceservices•Billpayments

Marketing promotions WebsiteandsocialmediaCustomer care channelEngagement surveys/mystery shoppers New stores and access

Regulatory Agencies •Compliance•Securityissues•Wastemanagement•Labourpractices•Franchising

Local authority inspectionsEmployees and industrial relationsTask force meetingsRegulatory engagementsFranchisediscussions

Employees •Compensationbenchmarking•Corporatecultureandvalues•Workplacesafety•Careerdevelopment•Employeewelfare

Monthly National Conference WeeklyOperationReviewManagement MeetingsIntranet, newsletter and broadcasting Training & Education programsStudent internshipJobrotationsthroughInternalHiringProgramOccupational safety and health team meetings

Suppliers •Partnershipforgrowth•Purchasecommitments

ProcurementprocessSupplier audits and evaluationVendorregistrationandprofiling

Civil Society Organisations

•Communitydevelopment•Climatechange

Community donations and aidCSR activities CollaborationwithNGOHubAsiaSocial media



MATERIAL SUSTAINABILITY MATTERS (102-46, 102-47, 103-1)

Material Sustainability Matters (“material matters”) comprise indicators that represent governance, economy, environment and societal topics that are important to both our retail operations and stakeholders.

7-ElevenconducteditsfirstmaterialityassessmentinFY2017andidentified15materialmattersthatweremostrelevant.Thisyear,the Group conducted a reassessment of material matters to ensure their relevance in representing our key opportunities and risks.

Basedon the reassessmentexercise, theGroupmaintainedall thematerialmattersand,consolidatedCarbonFootprintandTransportation (twomaterialmatters) tobecomeone, representedasClimateChange.Aweightedrankingexercisewas thenconductedusingthe14materialmattersinaworkshopmodetoderiveourmaterialitymatrixforFY2019.

Identification7-Eleven identified potentialmaterial matters based on the list of material matters of previous years, GRI standards, the Group's Impact on EES and peer industry. 14 key materialmattersfor2019wereidentifiedanddefined.

AssessmentMateriality Assessment was conducted with the Sustainability Committee in workshop mode to asses and rank the 14 key material matters based on its respective importance to the stakeholder groups and 7-Eleven'sbusiness operations.

EstablishmentThe outcome of the assessment were converted into a materiality matrix andpresented in accordance to our four fundamental sustainability teams. The matrix was thenanalysed by the Sustainability Committee.

ValidationThe established materiality matrix was then tabled to theSenior Management and BOD for validation and approval.



Sig

nifi

canc

e to

Sta

keho

lder

s

Significance to Business Operations

VeryHigh

VeryHigh

High

High

Medium

Med

ium

Sound Corporate Governance

SustainableEconomic

EnvironmentalStewardship

Upholding Social Responsibility

Material Matter

Sound Corporate Governance

2 Ethics and Integrity

4 Compliance

10 Corporate Governance and Transparency

Sustainable Economic

7 Supply Chain Management

Environmental Stewardship

11 Energy

12 WasteRecyclingandDisposal

14 Climate Change

Upholding Social Responsibility

1 FoodSafetyandQuality

3 ProductandServiceInnovation

5 OccupationalHealthandSafety

6 Training and Talent Development

8 EmployeeWell-being

9 Diversity and Inclusion

13 Community Engagement

MAPPING THE MATERIAL SUSTAINABILITY MATTERS

To understand the inter-linkages, we mapped out the relationship between our material matters, relevant stakeholder(s),corresponding GRI indicator(s) and the seven UN SDGs.

Material Sustainability Matters Relevant Stakeholders Corresponding GRI Indicators SDG

Governance

Ethics and Integrity • Investors• Employees

102-16Values,principles,standardsand norms of behaviour

102-17:Mechanismsforadviceandconcerns about ethics

103-2:ManagementApproach

Corporate Governance and Transparency

• Investors• Customers• Employees


Compliance • Investors• RegulatoryAgencies


103-3:Evaluationofthemanagementapproach





MATERIALITY MATRIX FY2019

7

1

35

8

6

13 10

4

2

11

12

14


MAPPING THE MATERIAL SUSTAINABILITY MATTERS (CONT'D)


Economic

Supply Chain Management • Investors• RegulatoryAgencies• Suppliers

102-9:SupplyChainManagement


203-2:Significantindirecteconomicimpacts

204-1:Proportionofspendingonlocalsuppliers

Environment

Energy • Customers• RegulatoryAgencies



302-1:Energyconsumptionwithintheorganisation

302-3:Energyintensity

302-4:Reductionofenergyconsumption

Climate Change • Customers• RegulatoryAgencies



305-1:Direct(Scope1)GHGemissions

Waste Recycling and Disposal • Customers• RegulatoryAgencies


306-2:Wastebytypeanddisposalmethod

Social

Product and Service Innovation • Customers 102-43:Approachtostakeholderengagement


Food Safety and Quality • Customers• RegulatoryAgencies



416-1:Assessmentofthehealthandsafety impacts of products and service categories

417-1:Requirementsforproductandservice information and labelling


13 CLIMATE ACTION


13 CLIMATE ACTION


9 INDUSTRY, INNOVATION AND INFRASTRUCTURE




13 CLIMATE ACTION

2 ZEROHUNGER



MAPPING THE MATERIAL SUSTAINABILITY MATTERS (CONT'D)


Social

Promoting Diversity and Inclusion

• Employees 102-7:Scaleoftheorganisation


401-1:Newemployeehiresandemployee turnover

405-1:Diversityofgovernancebodiesand employees

Employee Well-Being • Employees 103-2:ManagementApproach

401-2:Benefitsprovidedtofull-timeemployees that are not provided to temporaryorpart-timeemployees

Training and Talent Development

• Employees 103-2:ManagementApproach

404-1:Averagehoursoftrainingperyearper employee

404-2:Programmesforupgradingemployee skills and transitionassistance programs

404-3:Percentageofemployeesreceiving regular performance andcareer development reviews

Occupational Health and Safety • Employees• RegulatoryAgencies


403-1:OccupationalHealthandSafetymanagement system

403-2:Hazardidentification,riskassessment, and incident investigation (HIRARC)

403-4:Workerparticipation,consultation, and communication on occupational health and safety

403-5:Workertrainingonoccupationalhealth and safety

403-9:Work-relatedinjuries

Community Engagement • Employees• CivilSocietyOrganisations


413-1:Operationswithlocalcommunityengagement





5 GENDEREQUALITY

5 GENDEREQUALITY

5 GENDEREQUALITY




SOUND CORPORATE GOVERNANCE

Corporate Governance and Transparency (103-2)

Board Charter

OurBoard isatthepinnacleoftheGroup’scorporategovernancesystemandultimatelyresponsiblefortheperformanceandaffairsof7-Elevenand itssubsidiaries.AllBoardmembersareaccountable forchartingthestrategicdirectiontowardssoundcorporate governance.

OurBoardCharterservesasareferenceforBoardactivitiesinupholdingthestandardsoftheGroup’scorporategovernance.Thecharter provides guidance and direction for Directors and Management on the responsibilities of the Board, Board Committees and Senior Management and what is required of Directors in conducting their stewardship roles and responsibilities towards the Group.

Roles and Responsibilities of the Board

OurBoard isaccountable invariouswaystoshareholdersandstakeholderswith itskeypurposebeingtoensuretheGroup’sprosperity by collectively directing Group affairs while meeting the interests of stakeholders and shareholders. The Board is also designated to shape core values and standards for the Group to achieve a balance between the competing interests of shareholders and stakeholders.

The Directors are responsible to promote sound corporate governance within the Group, working together with senior management infosteringasoundcorporateculturewhichfortifiesprudent,ethicalandprofessionalbehaviouratalllevelsofbusinessoperations.Among the principle roles and responsibilities of the Board are planning, oversight and monitoring of the Group management on its corporate conduct and performance to ensure our business is strategically managed.

Ethics and Integrity (102-16, 102-17, 103-2)

At7-Eleven,weholdourselvestothehigheststandardsofprofessionalconduct.OurCodeofConductandEthicsoutlinestheexpectedstandardsofbehaviourforouremployeeswithrespecttocorporategovernanceandethicalprincipleswhilstpromotingintegrityandrespectamongemployees.Wedisseminatetherequirementstoouremployeesduringourorientationprogrammeorvia7-ElevenWiki.

Our Gift Policy,Whistle-blowing Policy and Grievance Handling Procedures ensure that we are committed to the values oftransparency,integrity,impartialityandaccountabilityintheday-to-dayoperationofourretailbusiness.

Gift Policy

OurGiftPolicyiteratesthatnoemployeesshallacceptanyformofgiftsorgratuitiesfromclients/customers,suppliers,contractorsoranyotherpartyhavingbusinessdealingswith theGroup.Uponofferedagiftprohibitedby thisPolicy,anemployeemustnotify the gift giver about this policy and graciously decline or return the gift. They are also required to report the incident to their ImmediateManagerandtheHumanResourcesDepartment.

Whistleblowing Policy

7-ElevenhasestablishedaWhistle-blowingPolicyasrequiredundertheMalaysianWhistleblowerProtectionAct2010topromotehighstandardsofethicalconductandopencommunicationwhilstensuringprotectiontothewhistleblowers.ThePolicyprovidesemployeesasafeavenuetoreportincidentsofmalpractice,corruption,financialimproprietyandmismanagementtotheHeadofInternal Audit

Forthisreportingyear,atotalofninewhistleblowingcaseswasreported,whereallofthesecaseswereinvestigatedanddealtwithaccordingtotheGroup’sprotocol.



SOUND CORPORATE GOVERNANCE (CONT'D)

Ethics and Integrity (102-16, 102-17, 103-2) (Cont'd)

Grievance Handling Procedures

These Procedures encourage employees to communicate grievances or incidents involving discrimination, harassment orintimidationwithoutfearofreprisal.TheGrouphasestablishedanonlinegrievanceplatform,7Assistforemployeestoaddresstheircomplaintsorconcernsinanonlinegrievanceform.Validgrievancesaretreatedinconfidenceandthenecessaryactiontakento resolve the issue.

Transparency in Corporate Communication

For7-Eleven,transparentcommunicationwithstakeholdersandshareholdersisvitalindeliveringtimelyinformationonourfinancialstatus,businessprogressandperformanceaswellasbuildingalong-termmutually-beneficialrelationship.

Our7-Elevencorporatewebsitewhichisaccessibletothepublicservesasanavenueforcommunicationwithourshareholders,investors and the public. The Investor Relations section is dedicated for sharing information such as Bursa announcements, financialreports,andcorporategovernancereports.Stakeholders’understandingoftheGroup’sgovernancepolicieshasbeenenhancedthroughthedisclosureoftheBoardCharter,Whistle-blowingPolicyanddetailsoftheAuditCommittee,NominatingCommitteeandRemunerationpoliciesofDirectorsontheGroup’scorporatewebsite.

Compliance (103-2, 103-3)

At7-Eleven,wepromoteacultureofcompliancebyensuringstrictadherencetolawsandregulations.Therequirementsofkeyregulations that govern the management of our human resource as well as the environment are incorporated in our operations.

LAWS AND REGULATIONSEmploymentAct1955

EmployeesProvidentFundAct1991To safeguard the rights of employees at workplace.

FoodAct1983(Act281)

FoodRegulations1985

FoodSafetyandQualityStandards

To ensure food products are properly handled.

OccupationalSafetyandHealthAct1994

SafetyandHealthCommitteeRegulations1996To uphold the safety of our working environment.

IndustrialRelationsAct1967 Topromoteandmaintainindustrialharmonyandfacilitatetheemployer-employee relations.

SUSTAINABLE ECONOMY

Supply Chain Management (102-9, 103-2, 203-2, 204-1)

TheGrouphasimplementedeffectiveinventorymanagement,stringentsuppliervettingandcross-dockingdeliverysystemandendeavours to maintain a healthy partnership with, among others, manufacturers, distributors, wholesalers and service agents whoarepartofthevaluechain.Wepreferentiallysupportlocalprocurementaspartofourcontributiontothegrowthofthelocaleconomy and to minimise our environmental footprint.

OurHandbookonProcurementPoliciesandProceduresandourPurchasingGuidelinesguidethesupplierselectionprocess.Toreducepotentialprocurementrisks,weconductpre-assessmentsonpotentialsuppliersandthecriteriaused includefinancialposition,productquality,regulatorycompliance,halalcertificationandlabellingrequirementsbeforesigningagreementswiththem.



ENVIRONMENTAL STEWARDSHIP

Energy (103-2, 103-3, 302-1, 302-3, 302-4)

TheGrouprecordedanaverageenergyconsumptionof7,524kWhinthemajorityofitsstoresinMalaysiainthereportingyear.WealsoachievedasavingsofRM413,000frominstalledenergy-savingdevicessuchasair-conditionersandchillersat314stores.

7,524 kWh

Average electricity consumption at our stores by months

7-Elevenbegantomonitorelectricityusageatitsheadquartersandbranchofficesaspartofourpolicyofensuringefficientenergyconsumptioninthereportingperiod.TheenergyusageforheadquartersandbranchofficesfromFY2017toFY2019arepresentedinthegraphsbelow.Wenoticedaconsumptionreductionof10.6%sinceFY2017atheadquartersandadropof2.4%sinceFY2018atourbranchoffices.

Ourconsumption inFY2019withregardtoelectricity intensity (amoreaccuratemeasureofenergyuse)was165Kwh/m2atheadquartersand76Kwh/m2atthebranchoffices.

OurinitiativestoencouragetheefficientuseofelectricityatourbuildingsincludetheuseofLEDinsteadofconventionallightingaswellasturningoffelectricalappliances,lightsandair-conditioningafterworkinghours.

Total Electricity Consumption (Kwh) at Headquarters

Total Electricity Consumption (Kwh) at Branch Offices

823,997

783,343

737,036

128,563

160,014 156,118

FY2017 FY2017FY2018 FY2018FY2019 FY2019

Electricity Intensity (Kwh/m2) at Headquarters

Electricity Intensity (Kwh/m2) at Branch Offices

184

175

165

62

78 76

FY2017 FY2017FY2018 FY2018FY2019 FY2019



ENVIRONMENTAL STEWARDSHIP (CONT'D)

Diesel Consumption (302-1, 302-4)

TheCrossDockDeliverySystemisourlogisticpracticesinceFY2017ofwhichitdoesnotonlyreplenishourinventoryefficiencybutalsoreducestransportationcost,delivery timeandminimisesourenvironmental footprint.Weuse40-footer trucks in thissystemtotransportourgoodsfromCDCtotheCrossDockHubslocatedatEastCoast,NorthernandSouthernpartofPeninsularMalaysia.

CDC (Bukit Raja, Klang)

40-footer Trucks Cross Dock Hubs 5-tonner Trucks 7-Eleven Chain Stores

Suchlogisticpracticeenabledustominimisethefrequencyoftripstoandfromourcross-dockhubsby80%.Incomparisontoourpreviousdeliverymodel,weachievedareductionof46%(or583,664litres)inourdieselconsumptionthisyear.However,weobservedadropof37%(or347,556litres)inourconsumptionsavingssinceFY2018duetothereducednumberoftripstakenby40-footertrucks.

Total Diesel Consumption Savings (Litre)

820,102

FY2017

931,220

FY2018

583,664

FY2019

ItisourstrategytoincreasethenumberofCrossDockhubnetworksinIpohandMelakatoexpediteshipmentstocustomersandby doing so enhance our competitive edge.




Climate Change (103-2, 103-3, 305-1)

According to The Sustainability Consortium, a global organisation dedicated to improving the sustainability of consumer products, 60%ofallgreenhousegas(“GHG”)emissionsworldwidecomefromtheglobalproductionanduseofconsumergoods.Withoperations and a value chain that span the country, we aim to galvanise collective action to reduce emissions, while taking steps to strengthen the resilience of our business.

Ourcarbonfootprintiscontinuouslymonitoredandthisyearwemanagedtosave1,694tonnesofcarbonemissionsthroughtheCross Dock Delivery system.

Carbon Emission Savings (tonne)

2,378

FY2017

2,701

FY2018

1,694

FY2019

Waste Recycling and Disposal (103-2, 306-2)

AccordingtotheWorldBankReport,theworldgeneratesanaverageof3.5milliontonsofsolidwasteperday.Itisexpectedthatdailywastegenerationwillincreaseto6milliontonnesperdayby2025.TheWorldEconomicForumreportsthat84percentofmaterialinputsarelosttolandfillorincinerationannually,representingalossof$2.7trillioninpotentiallyvaluablematerials.

At7-Eleven,wetakeproactivemeasurestominimisewastegenerationthatnotonlyreducethetotalamountofwastefordisposalbut also translates as cost savings to our operations.

Types of waste recycled by 7- Eleven

Old Corrugated Carton

Mix Plastic

Plastic

Wehaveputinplacenumerouswasterecyclinginitiativesandwemonitorthemonamonthlybasis.




Waste Recycling and Disposal (103-2, 306-2) (cont'd)

Total Waste Recycled (tonnes)

Old Corrugated Carton (OCC) Plastic(PL) MixPlastic(MP)

FY2017

305.3

13.4 14.0 19.6 18.1

86.1 78.7

326.2

259.9

FY2018 FY2019

Themostrecycledwastesatouroutletsthroughoutthethreeyearsareoldcorrugatedcartonsofwhichmakeupof90%oftotalwasterecycled.Thisisbecausecorrugatedboxesareusedfrequentlyinpacking,storageaswellasshippingofproductsfromourCDCto7-Elevenstores.

Wearecurrentlypilotingthe“NoPlasticBag”initiativeatsevenofourstoreswherewesubstitutetheconventionalplasticbagswithbiodegradable bags, heavy duty paper bags and reusable shopping bags. Also provided are wooden stirrers and paper straws instead of plastic stirrers and straws.

UPHOLDING SOCIAL RESPONSIBILITY

Product and Service Innovation (102-43, 103-2)

E-Commerce

Technological advances and societal shifts are changing the face of retail businesses. More companies are shifting towards adopting digital processes and solutions in their business operations.At7-Eleven,wecontinuetoexplorenewplatformsone-commercebyexpandingourpartnershipswithvariouse-commerceretailers.Ourmultiplepartnershipsenhanceourbusinesstransformationaswearenowabletoserveourcustomers24/7/365.

7-Elevenpartneredwith theRazerMerchantServices (formerlyMOLPaySdn.Bhd.) andNINJAVanMalaysiatoexpandtheRazerParcelPluswhichoffersseamlessshippingserviceatselected7-ElevenstoresacrossKlangValley,JohorBahruandPenang.Weintendtoofferthis service to all of our outlets throughout the country in the upcoming years.

BesidesRazerPayandAlipay,wehavealsointroducedanadditionale-walletoptionthisyearthroughourcollaborationwiththeTouch‘nGoe-wallet,anewe-walletinMalaysia.Thisinitiativeisaimedtoprovideamyriadofoptionsforcustomerstofacilitateonlinepaymentandreloadconveniencewithsecuredtransactionsacrossall7-Eleven’soutletnationwide.



UPHOLDING SOCIAL RESPONSIBILITY (CONT'D)

Product and Service Innovation (102-43, 103-2) (cont'd)

Ready-To-Eat Food (RTE)

Apartfromin-storeservices,7-Elevenalsooffersawidevarietyofready-to-eat(“RTE”)andmicrowavablemealswhicharewallet-friendly and convenient. Our range of RTE food offering includes sandwiches, coffee, sausages, fried noodles and “nasi lemak” atallofouroutletsinMalaysiatosatisfyconsumers’wholeadafast-pacedandbusylifestyle.7-ElevenensuresthesupplyofRTE food from our selected suppliers has undergone strict quality control for safe consumption. Our commitment food safety and qualityisdisclosedintheFoodSafety&Qualitysectionofthisstatement.

In the coming years, we intend to introduce a new and improved range of RTE food at our stores to provide variety and better adapttotherequirementsofourcustomers.Wealsoplantoupgradeourstorelayoutstoincludewithseatingfacilitiesatselectedstores for the comfort and convenience of our customers.

Food Safety and Quality (103-2, 103-3, 416-1, 417-1)

Foodqualityandsafetyareparamount inour industry.As leaders in the retailbusiness,webelieve thatmaintainingprogressiveandeffectivefoodsafetymanagementsystemsisacriticalpartofourcontinuedsuccess.Wehaveestablishedthe7-ElevenFoodManufacturingStandardsandPracticeswhich isadapted from internationalandnational foodqualitystandards.AndwestrictlycomplytotherelevantregulationsrelatedtofoodsafetyandqualityincludingtheMalaysiaFoodAct1983(Act283)andtheMalaysiaFoodRegulations1985.OurproductsarealsocertifiedundertheHazardAnalysisandCriticalControlPlan(“HACCP”)system.

WeperiodicallyconductinternalassessmentsonourperformanceonSafe&LegalStandardstoensureallour7-Elevenchainoutletsmaintaintheircertification.InFY2019,weassessedatotalof1522(63%)7-Elevenstoresnationwide.Wewereunabletocover all our stores because the assessment has yet to be implemented in the stores in East Malaysia and, some of our stores are inthemidstofrefurbishment.However,wesuccessfullyassessed503storesfromour1,522storesandwearepleasedtoreportthateachstorereceivedanaveragescoreofabove80%.

14

5

23

Environmental & Operational

All environmental and operational control and monitoring procedures that are vital to produce safe and legal food products measuresmustbeinplace,clearlyidentifiedandwell-documented.

Food Containers and Packaging

All food contact materials including containers and packaging must comply with the Malaysian Food Regulations1985PartVI"PackagesforFood".

Food Labelling

All intended use of food product needs to properly labelled with nutrients, ingredients and shelf-life information adhering tothe Malaysian Food Act 1983 and FoodRegulations1985.

Stringent Supplier Selection

Ensuring suppliers are Halal certified(MS1500:2009)andareincompliancewithourstatusasGMP,HACCPorISO22000:2015 certified manufacturesto reduce food safety risks to our customers.

Hazard Analysis and Critical Control Points (HACCP) Plan

Preventingbiological,chermicalandphysicalrisks from the food production, procurement and handling to manufacturing, distribution andconsumptionofthefinalfoodproducts.




Promoting Diversity and Inclusion (102-7, 103-2, 401-1, 405-1)

At7-Eleven,weseektoattract,developandretainindividualswhowilldiversifyourthinking,developnewideasanddemonstratethe skills needed to address future challenges in the retail sector. By investing in our employees, we not only promote the success of our business but also drive job satisfaction and engagement. Above all, we strive to create a conducive work environment that genuinelyconsidersouremployees’needs,ambitionsandwellbeing.

Withover2000conveniencestoresacross thenation,wecontribute to thesocio-economicof localcommunitiesbyofferingemploymentopportunities.Wearepleasedtoinformthat91%ofourtotalemployeesareMalaysianswithagoodbalancebetweenthemenandwomen.Over82%ofworkforcearebelowthe30yearsbracket,followedbytheagegroupof30–50yearsandtheagegroupofabove50years.ThepercentageofwomeninSeniorManagementwasat24%forthereportingperiod.

Workforce by Gender

Workforce by Age Groups

Workforce by Employment Type

FY2017 FY2018 FY2019

FY2017 FY2018 FY2019

Above 50 years

Senior Management

30 - 50 years

Management

Below 30 years

Executive

Non-Executive

FY2019 6,956

5,9477,123

7,2679,147

6,689

FY2018

FY2017

Female Male

146

43

2,063

106

14,205

474

15,791

147

45

2,052

108

10,871

485

12,432

175

50

2,216

124

12,590

496

14,311




Promoting Diversity and Inclusion (102-7, 103-2, 401-1, 405-1) (cont'd)

Although,weprioritisetherecruitmentofyoungtalentwhohaveapropensityto learn,adopteasily,tech-savvy,confidentandabletocontributenewideasthataresuitedtotheindustry,wealsoacknowledgetheroleofmatureandexperiencedemployees.Inseekingsuitablecandidatesforthisemploymentgroup,7-ElevencollaboratedwiththeArmedForcesEx-ServicemenAffairsCorporation(“PERHEBAT”)toorganisearecruitmentprogrammeinMarch2019.Thisprogrammeaimstoprovidejobopportunitiesforex-servicemenat7-ElevenMalaysiaandinFY2019,16individualswereemployedthroughthisprogramme.

TheGroupendeavourstorecruittalentwhoareactive,ambitiousandwell-alignedwithoursectortoremaincompetitive.WeofferouremployeesattractiveremunerationandemployeebenefitpackagesasarticulatedintheEmployeeWell-Beingsection.Whilewehired14,732employeesinFY2019,ourturnoverratewas17%.

TheGroupexperiencedadecreaseof34% inouremployeenewhire fromFY2018.This isdue to the implementationof theOptimizedHeadCountRatioinitiativeatourstoressinceOctober2019.TheheadcountratioreferstotheoptimizedheadcountthatisapprovedbytheGroupHumanResourcefornewemployeehiresbasedinprofileofthestore.Thisinitiativeistoeffectivelymanage manpower recruitment at all of our stores. Meanwhile, the slight increase in the employee turnover rate is driven by a highly competitive employment market due to growth in retail, seasonality as well as the nature of the convenience store industry where it attracts many short term employment seekers.


New Employee Hires

Men Women

FY2017

8,915 9,557

6,506

FY2018 FY2019

12,504 12,831

8,223

Employee Turnover Rate (%)

1617

FY2017 FY2018 FY2019

17

Employee Well-Being (103-2, 401-2)

Westrive toprovidebenefitspackagesthatarecompetitiveamongtheretail industry.AstheGroupgrowsanddevelops,wecontinuallyseektoimproveourofferings.Wearecommittedtokeepingouremployeeretentionrateshighandthus,wecontinuetoprovidevariousformsofemployeebenefitsintermsofhealthcare,lifestyle,transportation,flexibility,allowanceandrelatedbenefits.



Employee Well-Being (103-2, 401-2) (cont'd)

Inadditiontothis,7-ElevenofferstheGroupTermLifeInsurancetofurtherenhancetheprotectioncoverageofemployees.

Toencouragecross-departmentalinteraction,weorganisearangeofeventsthroughouttheyearincluding:

• FestiveCelebrations:Raya,ChineseNewYear,DeepavaliandChristmas• Annual Dinners• Staff Appreciation Day• Indoor Games • Bowling Tournaments, etc.

Investing in Training and Development (103-2, 404-1, 404-2, 404-3)

Ourabilitytoremaincompetitivewithintheretailsectorreliesonthecontinuousdevelopmentofouremployees’skills,experienceandknowledgeandtonurtureahigh-performancecultureintheworkforce.

7-Elevenaimstoprovideaseamlessandengagedpurchasingexperienceforourcustomerstoensurebusinesssustainabilityandprofitability.Hence,weprovidedcustomerservicetrainingprogrammeforouremployeestodevelopcrucialskillsandtechniquesinbuildingcustomerservice-orientedculture,retainingourvaluableclientsandincreasingourrepeatbusiness.

Training Programme Objective

Customer Service Training

• Toacquireskillsinimprovingcustomerserviceviaengagementandcommunication

• Toenhancecustomerretentionandincreaserepeatcustomers

• Toimproveunderstandingoncustomerexpectation

• Toenhanceproductknowledge

In addition, we also provided training programme on topics such as leadership skills, productivity, communication and related competencies. These programmes enable employees, particularly the senior management group to be updated on current trends in the marketplace to stay ahead of our competitors.

Training Programme Objective

WhaleDone!

• Toimproveproductivityofemployees

• Toenhanceconnectivitybetweenemployeesthroughactiveinteraction

• Toincreasetalentretentionatworkplace

FishPhilosophy

• Toinculcatefourelementsofcustomerservice:Bethere,Play,MakeTheirDayandChooseYourAttitudetobeimplementedintheworkingenvironment.

• Toimproveemployeeinteractions.

PlanningandOrganising• Toassistemployeebyprovidingclearunderstandingontheplanning

tools for effective implementation of a procedure, programme or a strategy.

Take Ownership • ToprovideleadershipskillsandknowledgeforSubordinates

7-ElevenCoreValues• Toprovideunderstandingonthenewlyestablishedcorevaluestobe

implemented at workplace.




Investing in Training and Development (103-2, 404-1, 404-2, 404-3) (cont'd)

Every7-Elevenemployeehasreceivedaminimumof8hoursoftrainingperyearsinceFY2018.WeinvestedRM1,162,166intotalfor trainingandanaverageofRM185peremployeethisyear.This investment translatedto119,607traininghoursacross fouremploymentlevels,namelySeniorManagement,Management,ExecutiveandNon-Executive.

Total Training Hours Average Training Hours Per Employee

117,432

213,965

119,607 7.8

14.3

8.0

FY2017 FY2017FY2018 FY2018FY2019 FY2019

Average Training Hours by Gender

6.7 9.2

6.7 9.5

12.4 16.5

FY2017

FY2018

FY2019

Men Women

Average Training Hours by Employment Type

FY2019FY2018FY2017

1.6

7.4

41.5

6.74.2 2.3

6.1

14.7

19.8

12.4 14.5

7.7

Management Executive Non-ExecutiveSenior Management




Investing in Training and Development (103-2, 404-1, 404-2, 404-3) (cont'd)

Employee Performance and Review

Wepromoteopenandregularcommunicationwithouremployeesthroughanumberofchannelstomotivatestrongperformersanddetectperformancegaps.Employeesareevaluatedbycomparingtheirperformancetothestandardsandexpectationsestablishedduring the appraisal period.

FollowingtheMeritIncrementguidelinestofinanciallyrewardresults

Objectively determining the event to which goals have or have not beenmet(Jan2019)

Providingongoingdialogueaboutprogress, course corrections, needed support and recognition (On-going)

Setting annual targets based on the company or functions strategic priorities(Jan2018)

Establishing standards of behavior and measurable results needed to achievetargets(Jan2018)

ThisappraisalreviewisonlyconductedforstoremanagersandStoreSupportCentre(“SSC”)employeesofwhichcomprising20%ofthetotalemployeesat7-Eleven.

Occupational Health and Safety (103-2, 403-1, 403-2, 403-4, 403-5, 403-9)

EnsuringthehealthandsafetyofouremployeesisapriorityattheGroup.Wehaveputinplacethe7-ElevenMalaysiaSafetyandHealthPolicyandweimposestrictcompliancetotheOccupationalSafetyandHealthAct1994.

Oneofour initiatives include theWorkplace InspectionJotformaswell as theHazard Identification,RiskAssessmentandRiskControl(“HIRARC”)atourcorporateheadquartersandstoresthisyeartoidentifysafetyhazardsinroutineandnon-routineactivitiesthroughout the retail operation.




Occupational Health and Safety (103-2, 403-1, 403-2, 403-4, 403-5, 403-9) (cont'd)

Wehavealsointroducedthe7-ElevenCrisisManagementManual(“CMM”)andIncidentInvestigationReportsystemwhichrequireemployeesatstorestoreportonnearmissincidents.ThisinitiativeisanextensiontoourAccidentEscalationReportproceduretokeeptrackonthenumberofaccidentsornearmissincidentsatoccurredatstoresinvolvingemployees,customersand/oron-the-job contractors.

TomanageoccupationalsafetyandhealthfortheGroup,7-ElevenhasestablishedadedicatedOccupationalHealthandSafety (“OSH”) committee, headed by the OSH Committee Chairman, comprising 20 employer representatives and 25 employeerepresentatives.WehavealsoformedanEmergencyResponseTeam(“ERT”)with11employeesbasedatheadquarters.Boththecommittee and ERT are responsible for the formulation of mitigation measures to minimise accidents and occupational health issues, ensuringtheGroupadherestoregulatoryrequirementsandcreatingawarenessofOSHrisksandhazardswithintheGroup.

7-Eleven Occupational Health and Safety Committee

Secretary

Assistant Secretary

OSH Committee Chairman

20 Employer Representative

25 Employee Representative

SpecificrolesandresponsibilitiesoftheOSHcommitteeinadherencetosafetyandhealthrequirementsasillustratedbelow.

Committee Role Task

Chairman

• ToensurethattheOccupationalHealthandSafetymanagementsystemisimplementedandsustained.

• ToensurethecommitteeisqualifiedandcompetentasHealthandSafetyRepresentatives

Employer Representative

• Toensurethattheworkplaceissafeanddoesnotposeanyrisktoemployees.

• Toidentifyprecautionarymethodsthatminimiserisksandhazardsatworkplace

• Toprovidethenecessarytraining,knowledgeandsupervisiontoemployeestoenhancetheirawareness on health and safety at work.

• Toensurethatallemployeescomplywiththesafetystandardsandrequirementsthatareimplemented.

Employee Representative

• ToinspectandidentifyhazardsandrisksthatmayoccuratchainstoresandbranchofficesaccordingtotheOHSPolicyPlan.

• ToreportthefindingsoftheinspectionorassessmenttotheHealthandSafetyCommittee.

• Toassistimmediatesuperiorininvestigatingincidentsandaccidentsandidentifyingremedialactionto prevent recurrence of such events.

• Toensureemployeescomplywiththehealthandsafetystandardsatworkplace.




Occupational Health and Safety (103-2, 403-1, 403-2, 403-4, 403-5, 403-9) (cont'd)

Inensuringeffectivemanagementofsafetyandhealthyatourworkplace,7-Elevenequipsitsemployeeswithcompetency-basedtraining to upskill themselves and keep abreast of the latest safety and health requirements.

Employee Training ProgrammeEffectiveSafety&HealthCommitteebyNIOSH(NationalInstituteofOccupationalSafetyandHealth)

Emergency Response Team training

EmergencyResponse–FirstAid&Cardiopulmonaryresuscitation(CPR)Training

Lost Time Injury Frequency Rate (“LTIFR”)

LTIFRreferstotheamountoflosttimeinjuriesoccurringintheworkplaceperonemillionman-hoursworked.InFY2019,weobservedaLTIFRof0.0041.

Enriching with The Community (103-2, 413-1)

The local communities where our stores are located and where our customers and suppliers live are the cornerstones of our business.Weareconsciousofoursocialresponsibilityandcontinuouslyplanandimplementprogrammesthatsupportandbenefitless fortunate.

TheGroup’scommunityoutreachandenvironmentaleffortsarecarriedoutby7-ElevenCommunityCare,ournon-profitinitiativeestablished to implement corporate responsibility programmes. Our efforts to uplift the community and protect the environment wererecognisedatthe2019CorporateSocialResponsibilityMalaysiaAwardswhere7-Elevenwasawarded“CompanyoftheYear(RetailCategory)”.Thisisthethirdtimethat7-Elevenhasreceivedthisaward.

Withthatinline,wecontinuedourpartnershipwithNGOHubAsiaandothercharitableorganisationstoensureenhancedandeffectiveoutcomesfromourprogrammes.Thisyear,7-Elevenhassupported406beneficiarieswithabudgetspentofmorethanRM300,000.ThefollowingarefurtherdetailsofthecommunityprogrammesweconductedinFY2019.

Caring for the Elderly

7-Elevenkick-startedtheNewYeartogetherwiththeladiesofGraceHomeKlangand provided free health screening for the community at Pusat Jagaan Siti Nor Aini.WorkingincollaborationwithTigasAlliancePharmacyandNGOHubAsia,weheld talks on healthy eating habits and recommended appropriate vitamins and dietarysupplementstoimprovethehealthofthoselivinginthesehomes.Wealsodistributed food hampers containing staples such as rice and oil.

A Time of Celebration and Sharing

WecollaboratedwithNGOHubAsiaandprovidedascrumptiousdinner for theelderlylivingattheEngYuanOldFolkHome.Duringthedinnerwedistributedfoodpackets and Ang Pow (red packets containing cash) which is a traditional practice for the Chinese. Similarly, during the Muslim festivalofHariRaya,wevisited30orphansat Pusat Jagaan Nuri and distributed Duit Raya(cashgifts)andcoinboxes.

Inadditiontothis,7-Elevenhascontributedmore than RM3millionworth of provisionscomprising both food and non-food itemsto various charity organisations in both PeninsulaMalaysiaandSabahandSarawakduring themonth ofRamadhan, from30thApril 2019 to 10th June 2019. The itemsincluded canned food, biscuits, rice, cooking oil, laundry detergent and toiletries.

The visit to Pusat Jagaan Siti Nor Aini Working was held on 18 January 2019

Chinese New Year celebration at the Eng Yuan Old Folk Home on 18 February 2019

Raya Cheer with children of Pusat Jagaan Nuri on 21 June 2019




Enriching with The Community (103-2, 413-1) (cont'd)

A Time of Celebration and Sharing (cont'd)

A Raya celebration organised by 7-Eleven towards the end of Ramadhan campaign. The event was held at the The Pearl Hotel, Kuala Lumpur and attended by representatives from 7-Eleven

Malaysia and Semurni Kasih recipients.

A Friendly Match for the Disabled

TocommemorateWorldDownSyndromeDayonthe21stofMarch2019,7-ElevenjointlyorganisedatelematchwithNGOHubAsiaatPersatuan Penjagaan Kanak-Kanak Cacat Klang (“PPKKCK”), Selangor. The telematch comprised games that enhance self-grooming skills and teamwork among 84 disabled children. In thespiritof‘EveryoneisaWinner’,eachparticipantwasawardedwithagoldmedaland a bag of treats.

Environmental Aid and Education

InconjunctionwithWorldEarthMonth,volunteersfrom7-Elevenorganisedaneco-educational visit to the Bukit Tagar Sanitary Landfill for the youths fromRumah Saffiyah and Sweet Care Home.Theactivityinvolvedadetailedpresentationonthelandfillincludingitsdesignandcapacity,wastemanagementprocesses,environmentalmonitoringandthegenerationofrenewableenergyfromthelandfillgas(methane).Duringthevisit,representativesfromTheKUB-BerjayaEnviro,theoperatorofthelandfill,alsoparticipatedintheprogramme.

In addition to this, we organised an environmental preservation programme for the underprivileged children of Pertubuhan Amal & Kebajikan Anak-Anak Islam Tersisih Selangor(PAKATS).Theparticipantswereexposedtotheplantingofvegetationandfruitsaround their compound.

The children of (PPKKCK), Selangor at the end of the telematch on 15 March 2019

The youths of Rumah Saffiyah and Sweet Care Home during the eco-educational visit on 24 April 2019

Around 12 children participated in the planting activity on20 November 2019




Enriching with The Community (103-2, 413-1) (cont'd)

Lending A Helping Hand During Haze

InSeptember2019,asanationwesuffered thehealth impactsarising fromthepoorairqualityexperiencedduringtheatmosphericphenomenonknownas the haze.We reached out to selected underprivileged communitieswhowere adversely affectedby the haze anddistributedN95particulatemasks,eyedrops,vitaminsanddietarysupplementsaswellassnacksrichinVitaminEincludingnutsandsunflowerseeds.ThesecommunitiesincludedchildrenandtheelderlyfromSaiPandianOrphanage,Pertubuhan Pusat Kebajikan Destiny, Rumah Anak Yatim Al-Munirah, GT Community Care and Persatuan Thalasemia Selangor.

Coaching and Educating Young Leaders of Tomorrow

7-Elevenorganisedanentrepreneurshipworkshop for thechildrenofHappyNeighbourhood (Jiran Ria)at theEnggangApartments inPuchong,Selangorwith the primary goal of instilling an entrepreneurial mindset in the younger generation. The workshop started off with a briefing coordinated by ouremployees using visual aids on how to build micro enterprises. The children were then divided into two groups and assigned to make a famous local dessert known as ‘aiskrim Malaysia’ as theirproduct.Theywerealso taughthow toprepare attractive marketing material to promote the sales of the dessert.

TheGroupcollaboratedwithYellowHouseKualaLumpur(“YHKL”)andNGOHubAsiatoorganiseawalkingtourofKualaLumpurforagroupof45MalaysianGirl Guides from the Pangsapuri Perumahan Rakyat community residing in the city of Kuala Lumpur. The aim of the tour was to educate youths on how diverse the city was in terms of ethnicity and nationality. They leisurely strolled through thecity’swell-knowncultural sites andplacesofworship.At theendof theactivity, the participants were each given a bag of treats and served with our freshandready-to-eatmeals.

Doing Good Deeds Together

This year, we chose to kickstart the #BuatBaikTogether campaign with our CSR partner, Malaysian Rare Disorders Malaysia (“MRDS”). MRDS is a voluntary organisation set-up to represent and look out for the welfare of individualsaffected by rare disorders such as brittle bone disease and Marfan syndrome and, their family members. The money donated by 7-Eleven was used toorganise leisure activities aswell as to provide financial assistance to those

diagnosed with these disorders as well as pay for genetic testing to ascertain if other members of the family suffer the similar syndrome.

During the campaign period, customers were encouraged to contribute by purchasing necessities and supplies from 7-Eleven Malaysia outlets acrossMalaysiaanddropping them intocontributionboxes.Thecontributionsweredistributedby7-ElevenMalaysiatoselectedbeneficiariesacrossthecountry.

The distribution of haze essentials to the selected underprivileged communities on 21 September 2019

The workshop held on 26 July 2019 saw a participation of 60 children from the Happy

Neighbourhood (Jiran Ria)

The participants of the organised walking tour on 26 August 2019

The #BuatBaikTogether campaign was held from 24 September – 4 November 2019




Donation FY2019

Apartfromcommunityprogrammes,7-Elevenalsocontributedfinancialaidtothefollowingrecipients.

Month Name of Beneficiary Amount Donated (RM’000)

January BukitKiara-RidingforDisabledFund(RDA) 50

April ScienceofLifeStudies247 575

June LivingHope12thAnniversaryCharityBazaar 5

June Spiritof57UnityRibbons 2

August TzuChiInternationalSchoolFundRaisingLuncheon 60

August MalaysianGymnasticsFederation 50

September KelabRagbiSMKTinggiBatuPahat2019 5

September SiswaFoodBankProgrammeUSM 6

October Lean in Malaysia 30

October TunkuLaksamanaJohorCancerFoundation 50

December Dignity and Services 50

December Malaysian Rare Disorders Malaysia 7

TOTAL 890




GRI CONTENT INDEX (102-55)

GRI Standard Section Page

ORGANISATIONAL PROFILE

102-1 Name of the organisation About This Statement 24

102-2 Activities, brands, products, and services About This Statement 24

102-3 Location of headquarters Scope of Reporting 24

102-4 Location of operations Scope of Reporting 24

102-7 Scale of the organisation PromotingDiversityandInclusion 41

102-9 Supply chain Supply Chain Management 35

ETHICS AND INTEGRITY

102-16 Values,principles,standards,andnormsofbehaviour Sustainability Strategy and Framework

25

Ethics and Integrity 34

102-17 Mechanisms for advice and concerns about ethics Ethics and Integrity 34

GOVERNANCE

102-18 Governance Structure Sustainability Governance 28

102-20 Executive-levelresponsibilityforeconomic,environmental,and social topics

Sustainability Governance 28

102-32 Highestgovernancebody’sroleinsustainabilityreporting Sustainability Governance 28

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups Stakeholder Engagement 29

102-43 Approach to Stakeholder Engagement Stakeholder Engagement 29

ProductandServiceInnovation 40

102-44 Key topics and concerns raised Stakeholder Engagement 29

102-46 DefiningreportcontentandtopicBoundaries Scope of Reporting 24

Material Sustainability Matters 30

102-47 List of material topics Material Sustainability Matters 30

102-50 Reporting period ReportingPeriod 24

102-53 Contact point for questions regarding the report Feedback 24

102-55 GRIContentIndex GRIContentIndex 51

MANAGEMENT APPROACH

103-1 ExplanationofthematerialtopicanditsBoundary Material Sustainability Matters 30

103-2 The management approach and its components All material matters sections Throughout the report

103-3 Evaluation of the management approach Compliance 35

Energy 36

Climate Change 38

FoodandSafetyQuality 40

SUPPLY CHAIN MANAGEMENT

203-2 Significantindirecteconomicimpacts Supply Chain Management 35

204-1 Proportionofspendingonlocalsuppliers Supply Chain Management 35


EMPLOYEE WELL-BEING

401-2 Benefitsprovidedtofull-timeemployeesthatarenotprovidedtotemporaryorpart-timeemployees

EmployeeWell-Being 42

TRAINING AND DEVELOPMENT

404-1 Average hours of training per year per employee Investing in Training and Development

44

404-2 Programmesforupgradingemployeeskillandtransitionassistance programmes

Investing in Training and Development

43

404-3 Percentageofemployeesreceivingregularperformanceand career development reviews

Investing in Training and Development

45

OCCUPATIONAL SAFETY AND HEALTH

403-1 OccupationalHealthandSafetymanagementsystem OccupationalSafetyandHealth 45

403-2 Hazardidentification,riskassessment,andincidentinvestigation(HIRARC)

OccupationalSafetyandHealth 46

403-4 Workerparticipation,consultation,andcommunicationonoccupational health and safety

OccupationalSafetyandHealth 46

403-5 Workertrainingonoccupationalhealthandsafety OccupationalSafetyandHealth 47

403-9 Work-relatedinjuries OccupationalSafetyandHealth 47

FOOD SAFETY AND QUALITY

416-1 Assessment of the health and safety impacts of products and service categories

FoodSafetyandQuality 40

417-1 Requirements for product and service information and labelling

FoodSafetyandQuality 40

ENGAGING LOCAL COMMUNITIES

413-1 Operations with local community engagement, impact assessments, and development programs

Engaging Local Communities 47

GRI CONTENT INDEX (102-55) (CONT'D)

GRI Standard Section Page

ENERGY

302-1 Energy Consumption within the organisation Energy 36

302-3 Energy intensity Energy 36

302-4 Reduction of energy consumption Energy 37

CLIMATE CHANGE

305-1 Direct(Scope1)GHGemissions Climate Change 38

WASTE RECYCLING AND DISPOSAL

306-2 Wastebytypeanddisposalmethod WasteRecyclingandDisposal 38

PROMOTING DIVERSITY AND INCLUSION

401-1 New employee hires and employee turnover PromotingDiversityandInclusion 42

405-1 Diversity of governance bodies and employees PromotingDiversityandInclusion 42



GROUP FINANCIAL SUMMARY

2019 2018 2017Restated#

2016Restated#

2015Description RM’000 RM’000 RM’000 RM’000 RM’000Revenue 2,361,058 2,217,049 2,187,102 2,103,367 2,006,284

ProfitBeforeTax 76,653 73,859 70,496 70,872 77,857

ProfitAfterTax 54,084 51,330 50,107 52,215 55,813

ProfitAttributableToShareholder 54,058 51,307 50,107 52,215 55,813

Share Capital 1,485,138 1,485,138 1,485,138 123,338 123,338

Treasury shares (128,928) (161,941) (190,625) (190,625) (58,913)

SharePremium - - - 1,361,800 1,361,800

Assets Revaluation Reserve 41,969 41,152 40,784 - -

Reserves 46,985 71,208 81,985 84,066 87,317

CapitalReorganisationDeficit (1,343,248) (1,343,248) (1,343,248) (1,343,248) (1,343,248)

Non-controllingInterest 195 169 - - -

Total Equity 102,111 92,478 74,034 35,331 170,294

Long Term Liabilities 579,945 72,723 69,236 48,038 14,700

Current Liabilities 739,963 584,166 651,698 690,324 558,808

Total Equity and Liabilities 1,422,019 749,367 794,968 773,693 743,802

Property,Plant&Equipment 338,129 323,982 350,404 318,801 303,608

Right-of-useassets 608,530 - - - -

InvestmentProperty - 400 400 400 350

Intangible Assets 29,390 34,289 35,298 35,822 21,232

InvestmentandOtherNon-CurrentAsset 42,533 1 1 1 1

Current Assets 403,437 390,695 408,865 418,669 418,611

Total Assets 1,422,019 749,367 794,968 773,693 743,802

NetAssetsPerShare(sen) 8.93 8.23 6.67 3.18 14.28

BasicEarningPerShare(sen) 4.74 4.57 4.51 4.51 4.56

# Restatedtoreflectthefairvalueadjustmentforinvestmentproperty.


GROUP FINANCIAL HIGHLIGHTS

CHARTS ON FINANCIAL HIGHLIGHTS

2015 2016 2017 2018 2019

Corporate Stores 1,793 1,975 2,083 2,155 2,248

FranchiseStores 151 147 142 132 163

Store Count 1,944 2,122 2,225 2,287 2,411

Revenue(RM’million) 2,006.3 2,103.3 2,187.1 2,217.0 2,361.1

ProfitafterTax(RM’million) 55.8 52.2 50.1 51.3 54.1

EBITDA(RM’million) 127.4 126.5 139.9 147.7 162.1

Notes: EBITDAdefinedasprofitbeforefinancecost,tax,depreciationofassetsandexcludeimpactsfromMFRS16:Leases.

Profit After Tax (RM 'million) EBITDA (RM 'million)

Revenue (RM 'million)Store CountFranchiseStoresCorporate Stores

'19

'19

'19

'19

’15

’15

’15

’15

’16

’16

’16

’16

‘17

‘17

‘17

‘17

’18

’18

’18

’18

’15 ’16 ’15‘17 ’16’18 ‘17'19 ’18 '19

1,793 1,975 2,083 2,155 2,248 2,006.3

2,103.3

2,187.12,217.0

2,361.1

127.4 126.5

139.9147.7

162.1

55.852.2 50.1 51.3 54.1

1,944

151

147142

132163

2,1222,225 2,287

2,411


CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors (the “Board”) of 7-ElevenMalaysiaHoldingsBerhad (the “Company”) recognises the importance of adoptinghighcorporategovernancestandardstoenhanceshareholders’value,besidessafeguardingstakeholders’interest.Initsapplication of corporate governance practices, the Board has taken into consideration the enumerations of the Malaysian Code on Corporate Governance (“MCCG” or the “Code”)andParagraph15.25of theMainMarketListingRequirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).

Detail applications for each practice as set out in the Code is disclosed in the Corporate Governance Report which is available on theCompany’scorporatewebsiteatwww.7eleven.com.my/investor-relations.

PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS

PART I: BOARD RESPONSIBILITIES

1) Establishing clear roles and responsibilities of the Board

Board of Directors

The Board recognises the key role it plays in charting the strategic direction of the Company and has assumed the following duties and responsibilities in discharging its fiduciary and leadership functions:

• reviewing,evaluating,adoptingandapprovingthestrategicplansandpoliciesoftheCompanyanditssubsidiaries (the “Group”);

• overseeingandmonitoring theconductofbusiness, financialperformanceandmajorcapital commitmentsof theGroup;

• reviewingandadoptingbudgetsandfinancialresultsoftheGroup,monitoringcompliancewithapplicablefinancialreporting standards and the integrity and adequacy of financial information disclosure;

• reviewingandapprovinganymajorcorporateproposal,newbusinessventureorjointventureoftheGroup;• identifyingprincipalrisksanddeployingappropriateriskmanagementsystemtomanagetheserisks;• establishingandoverseeingasuccessionplanningprogrammefortheGroup,includingremunerationpolicy;• establishing, reviewingand implementingcorporatecommunicationpolicieswithshareholdersand investors,other

key stakeholders and the public;• reviewingtheadequacyandintegrityoftheinternalcontrolandmanagementinformationsystemsoftheGroup;and• developingacorporatecodeofconducttoaddress,amongstothers,anyconflictofinterestrelatingtoDirectors,major

shareholders and employees in the Group. Chairman of the Board

TheChairman,TanSriDato’SeriAbdullHamidbinEmbongisanIndependentNon-ExecutiveDirectorwhochairsandleadtheBoardmeetingsbyencouragingandelicitingtheviewsofalltheBoardmembers.Heensuresthatproperweightageandtime are given to issues of corporate governance, business operations and strategies raised in the Board meetings.

TherolesoftheChairmanareseparatefromtheChiefExecutiveOfficer.TheChiefExecutiveOfficer,Mr.ColinGeorgeHarveyisresponsiblefortheday-to-dayoperationsandmanagementofthebusiness.

ThereisacleardivisionofresponsibilitiesbetweentheChairmanoftheBoardandtheChiefExecutiveOfficertoensureabalance of power and authority. The Chairman is responsible for ensuring the integrity and effectiveness of the governance processoftheBoardwhiletheChiefExecutiveOfficerholdstheprimaryexecutiveresponsibilityfortheGroup’sbusinessperformance and manages the Group in accordance with the strategies and policies approved by the Board, leading ExecutiveDirectorsinmakingandimplementingtheday-to-daydecisionsonthebusinessoperations.


PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

Part I: Board responsibilities (cont’d)

1) Establishing clear roles and responsibilities of the Board (cont’d)

QualifiedCompanySecretaries

TheCompanySecretariesplayanadvisoryroletotheBoardinrelationtotheCompany’sconstitution,policies,proceduresand compliance with relevant regulatory requirements, code or guidance and legislations.

The Directors have unrestricted access to the advice and services of the Company Secretaries to enable them to discharge theirdutieseffectivelyandtheBoard’sproceduresareadheredtoatalltimes.TheBoardisregularlyupdatedandadvisedbytheCompanySecretarieswhoarequalifiedandexperiencedonstatutoryandregulatoryrequirements,andtheresultantimplications of any change therein to the Group and Directors in relation to their duties and responsibilities.

The Company Secretaries organise and attend all Board meetings including the Annual General Meetings and ensure that all proceduresarefollowedandalltheCompany’sstatutoryrecordsareupdatedandmaintainedaccordinglyattheCompany’sregistered address.

Directors

TheExecutiveDirectorsareresponsibleforprovidingleadershipandoverseeingtheday-to-dayoperationsandmanagementwithintheirspecificareasofexpertiseorassignedresponsibilities.

TheNon-ExecutiveDirectors,bothIndependentaswellasNon-Independent,arenotinvolvedintheday-to-daymanagementoftheCompanybutcontributetothedevelopmentoftheCompany’sbusinessstrategieswiththeexpertiseandexperiencetheybringtotheBoard.TheNon-ExecutiveDirectors’involvementin,andcontributionto,theBoardCommitteesenhancesthe effectiveness of the Company’s governance processes by providing independent judgement and objectivity to theBoard’sdecision.

Access to information and advice

DirectorsareentitledtounrestrictedaccesstoalltheCompany’sinformation,documents,recordsandproperties,eitherasa full Board or in their individual capacity in order to better discharge their responsibilities.

To facilitate the Board meetings, notices on agenda together with supporting Board papers are circulated to the Directors inadvanceofeachBoardmeeting.TheBoardpapersinclude,amongstothers,QuarterlyFinancialReport,InternalAuditReport,minutesofallBoardCommitteesmeetings,listofallannouncementsmade,summaryofDirectors’dealings,listofallBoardCircularResolutionspassedandanyothermattersrequiringtheBoard’sapproval.SeniorManagement,otherseniorexecutivesorprofessionaladvisersareinvitedtoattendtheBoardmeetingstoprovideadditionalinsightsandprofessionalviews,adviceandexplanationonspecificitemsontheMeetingagenda,wherenecessary.

The Board has adopted a policy enabling the Board Committees and Directors to have access to independent professional adviceattheCompany’sexpenseasandwhenconsiderednecessary,infurtheranceoftheirduties.Thispolicyisincludedin the Board Charter.

CORPORATE GOVERNANCEOVERVIEW STATEMENT



Part I: Board responsibilities (cont’d)

2) Demarcation of responsibilities

Board Charter

The Company has established and adopted a Board Charter which serves as a reference point for Board activities. The Board Charter provides guidance for Directors and Management regarding the responsibilities of the Board, Board Committees and SeniorManagement,therequirementsofDirectorsincarryingouttheirstewardshiprolesandindischargingtheirfiduciarydutiestowardstheCompanyaswellasBoardroomactivities.TheBoardCharter ispubliclyavailableontheCompany’swebsiteatwww.7eleven.com.my.

The Board has established a formal schedule of matters reserved to the Board for its deliberation and decision in order to enhance the delineation of roles between the Board and Management, as well as to ensure the direction and control of the Group’soperationsareintheBoard’shands.

The Board Charter would be periodically reviewed and updated in accordance with the needs of the Company and any new regulation that may have an impact on the discharge of the Board's responsibilities. Any subsequent amendment to the Board Charter would be approved by the Board.

3) Good business conduct and corporate culture

Code of Ethics

TheBoardhasformalisedaDirectors’CodeofEthicssettingoutthestandardsofethicalbusinessbehaviourexpectedfromDirectors, and has embedded it in the Board Charter. Whilethereareindividualprovisionsgoverningemployees’behaviourandconduct,theCompanyrecognisestheimportanceof having in place a formalised Code of Conduct/ Ethics setting out ethical corporate culture, acceptable behaviour, business ethicsandconductfortheGroup’semployees,andstepswillbetakentoformalisesuchaCodeofConduct/EthicsforobservancebytheGroup’semployees,includingmechanismstomonitorcompliancethereof.

The Board has established a whistle blowing mechanism, including pertinent policies and procedures, with the aim to provide an avenue for concerns relating to possible breaches of business conduct, non-compliances of laws andregulatory requirements, and other questionable practices to be raised by employees as well as outside parties without fearofreprisalsorretaliationbytheCompany.TheWhistleBlowingPolicyispubliclyavailableontheCompany’swebsiteat www.7eleven.com.my.

Whistle blowing

TheCompany’sWhistleBlowingPolicywhichcanbeviewedindetailattheCompany’swebsiteatwww.7eleven.com.my/corporate-governanceoutlines theprocessesandproceduresonhow to raiseaconcernproperly should therebeanybreach of ethics, improprieties or irregularities involving any employee, Management or Directors of the Company.

Sustainability

The Board is mindful of its responsibility on the Economy, Environmental and Governance (“EES”) aspects of business sustainability. As such, the EES aspects are considered by the Board in its corporate strategies. Cognisant of this responsibility, theBoardhasadoptedaSustainabilityPolicythataddressestheimpactoftheGroup’sbusinessesonEESelements.




Part II: Board composition

1) Strengthening the Board’s composition

AsofthedateofthisStatement,theBoardconsistedofnine(9)members,comprisingthree(2)ExecutiveDirectors,three(3)Non-IndependentNon-ExecutiveDirectorsandfour(4)IndependentNon-ExecutiveDirectors.ThiscompositionfulfilstheListingRequirements,whichstipulatethatatleastthree(3)Directorsorone-third(1/3rd)oftheBoard,whicheverishigher,mustbeindependent.TheBoardtooknoteoftherequirementofPractice4.1oftheMCCGwhichrequiresatleasthalfoftheBoardcomprisesIndependentDirectors.However,theNCisoftheviewthatthecurrentBoardsizeandcompositionisappropriateandeffectivetakingaccountthenatureofbusinessoperationsoftheCompany.TheBoardisalsosatisfiedwiththe current board composition. Nevertheless, the Board may consider increasing the number of Independent Director should there be a suitable candidate.

TheprofileofeachDirectorissetoutonpages8to11ofthisAnnualReport.TheDirectors,withtheirdiversebackgroundandqualifications,collectivelybringwiththemawiderangeofexperienceandexpertiseinareassuchasaccountingandauditing,taxation,retail,finance,legal,informationtechnologyandinvestment.

The presence of Independent Non-Executive Directors fulfils the pivotal role in corporate accountability. The role ofIndependentNon-ExecutiveDirectors isparticularly importantastheyprovideunbiasedand independentviews,advicesand judgements to take into account of the interest, not only of the Group, but also the stakeholders.

Board Committees

Toassistinthedischargeofitsstewardshiprole,theBoardhasestablishedthefollowingBoardCommitteestoexaminespecificmatterswithintheirrespectivetermsofreference,asapprovedbytheBoard:

• AuditCommittee;• NominatingCommittee;• RemunerationCommittee;and• RiskManagementCommittee.

The Board Committees report to the Board on their recommendations, while the ultimate responsibility for decision making lies with the Board.

I. Nominating Committee

TheBoardhasestablishedaNominatingCommitteetoconsidercandidatesfordirectorshipandBoardCommittee’smembership, and to review the effectiveness of the Board, through performance assessment of the Board, Board Committees, individual Director and individual Audit Committee member. The terms of reference of Nominating CommitteeispubliclyavailableontheCompany’swebsiteatwww.7eleven.com.my.

TheNominatingCommitteecomprisesthefollowingmembersandtheirattendanceduringthefinancialyearended31December2019areasfollows:

Name of Nominating Committee Member Meeting attended

Shalet Marian, Chairperson (IndependentNon-ExecutiveDirector)

2/2

MuhammadLukmanbinMusa@Hussain,member(IndependentNon-ExecutiveDirector)

2/2

TanWaiFoon,member(Non-IndependentNon-ExecutiveDirector)

2/2




Part II: Board composition (cont’d)

1) Strengthening the Board’s composition (cont’d)

I. Nominating Committee (cont’d)

TheBoardhasentrustedspecifictermsofreferencetotheNominatingCommittee,whichcover,inter-alia,thefollowingsalient functions:

• toassisttheBoardinreviewing,onanannualbasis,therequiredmixofskills,experienceandotherqualities,including core competencies of Directors;

• to assess and recommend to the Board, candidates for directorship andBoardCommittee’smembership,including chairmanship;

• toestablishamechanismfortheformalannualassessmentoftheeffectivenessoftheBoard,asawhole,andthe contribution of each individual Director based on objective performance criteria; and

• to provide adequate training for the Board members and orientation of new Directors with respect to thebusinesses, structure and management of the Group, enabling the Directors to receive appropriate continuous training in order to keep them apprised of regulatory requirements.

TheBoardDiversityPolicyestablishedbytheCompanyhasnospecifictargetongender,ageorethnicitycomposition

in the Board, as it believes the Company should be appointing Directors who bring with them the requisite skills and experience to enable theCompany realises its corporate strategies and objective. Nevertheless, the currentcompositionoftheBoardrepresentsadiversemixofDirectorsofdifferentgender,ageandethnicity,inadditiontotheblendofbackground,skills,experienceandexpertise.

Forthefinancialyearended31December2019,theNominatingCommitteecarriedout,andreportedtotheBoardthe outcome of, the following key activities:

• conductedtheannualassessmentontheeffectivenessoftheBoard,BoardCommitteesandindividualDirector;• conductedindependenceassessmentforIndependentNon-ExecutiveDirectors;• recommendedtotheBoard,theDirectorswhoaredueforre-electionbyrotationattheSixthAnnualGeneral

Meeting (“AGM”); and• reviewedthetermofofficeandperformanceof theAuditCommitteeandeachof itsmemberstodetermine

whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

A formal performance assessment of the Board, Board Committees and individual Director enables the Board to assess itsperformanceandidentifyareasforimprovement.Suchaformalassessmentwasconductedforthefinancialyearended31December2019,andwasguidedbytheCorporateGovernanceGuide–TowardsBoardroomExcellencetaking into consideration the following key elements for assessment:

• appropriate size, composition, independence,mix of skills and experiencewithin theBoard and theBoardCommittees;

• cleardefinitionoftheBoardandBoardCommittees’rolesandresponsibilities;• effectivenessoftheBoardandBoardCommitteesincarryingouttheirrolesandresponsibilitiesasstipulatedin

the Board Charter and/or terms of reference;• sufficiency and relevance of knowledge and expertise of individual Director in their respective capacity as

members of the Board and Board Committees; and• Directors’character,experience,competency,integrity,andtimecommitmenttoeffectivelydischargetheirroles

as Directors, including willingness to devote time in performing their roles, apart from attending Board meetings.

Basedontheresultsoftheassessment,theBoard issatisfiedthat,theBoardasawhole,theBoardCommitteesand each individual Director had performed well and effectively. The overall composition of the Board in terms of size, themixof skills, experiencewasalsobalancedandappropriate.A scoringmechanismwasusedandeachBoard member was provided with his/her individual peer aggregate assessment and comments (if any), for personal information and further development. In addition, the Board has obtained the annual declaration of independence from theIndependentDirectorsconfirmingtheirindependence.






I. Nominating Committee (cont’d)

In considering candidates for directorship, the Nominating Committee takes into account the following:

• thecandidates’skills,knowledge,expertise,experience;• professionalism;• integrity;and• in thecaseofcandidates for thepositionof IndependentNon-ExecutiveDirectors, thecandidates’ability to

dischargesuchresponsibilities/functionsasexpectedfromIndependentNon-ExecutiveDirectors.

Proposedappointmentofmember(s)totheBoardtofillcasualvacancyandproposedre-electionofDirectorsseekingforre-electionattheAGMarerecommendedbytheNominatingCommitteetotheBoardforapprovalandconsiderationfortablingattheAGMforshareholders’approval,asthecasemaybe.

InaccordancewithArticle99oftheCompany’sConstitution,atleastone-third(1/3)oftheDirectors,orthenumbernearesttoone-third(1/3)shallretirefromofficeprovidedalwaysthatallDirectorsshallretirefromofficeatleastonceineachthree(3)yearsbutshallbeeligibleforre-election.

DirectorswhoareappointedbytheBoardtofillacasualvacancyshallholdofficeuntilthenextfollowingAGMandshallthenbeeligibleforre-electionbutshallnotbetakenintoaccountindeterminingtheDirectorswhoaretoretirebyrotationattheAGMpursuanttoArticle105oftheCompany’sConstitution.

The Company Secretaries ensure that all appointments of Directors are properly made and that all necessary information areobtainedfromtheDirectorsfortheCompany’srecordsandforthepurposesofmeetingstatutoryobligationsaswell as obligations arising from the Listing Requirements of Bursa Securities.

II. Remuneration Committee

In order to assist the Board on fair remuneration practices and attracting, retaining and motivating Directors, the Board establishedaRemunerationCommitteetoreviewDirectors’remunerationmattersandmakerelevantrecommendationsto the Board.

TheRemunerationCommitteecomprisesthefollowingmembersandtheirattendanceduringthefinancialyearended31December2019areasfollows:

Name of Remuneration Committee Member Meeting attended

TanWaiFoon,Chairperson(Non-IndependentNon-ExecutiveDirector)

2/2

MuhammadLukmanbinMusa@Hussain,member(IndependentNon-ExecutiveDirector)

2/2

Shalet Marian, member (IndependentNon-ExecutiveDirector)

2/2






II. Remuneration Committee (cont’d)

TheBoardhasstipulatedspecifictermsofreferencefortheRemunerationCommittee,which includethefollowingfunctions:

• to review and assess the remuneration packages of the Executive Directors in all forms, with or withoutindependent professional advice;

• toensurethe levelsofremunerationaresufficientlyattractivetoretainDirectorsneededtoruntheCompanysuccessfully;

• tostructurethecomponentpartsofremunerationsoastolinkrewardstocorporateandindividualperformanceand to assess the needs of the Company for talent at Board level at a particular time; and

• torecommendtotheBoardofDirectors,thepolicyandframeworkforDirectors’remunerationaswellastheremunerationpackagesandtermsofserviceofExecutiveDirectors.

No Director shall take part in decisions involving his/her own remuneration.

2) Reinforcing independence

In line with the MCCG, the Board, with the assistance of the Nominating Committee reviews the independence of the Company’sIndependentNon-ExecutiveDirectorsonanannualbasis.TheBoardadoptsthedefinitionofan‘IndependentNon-ExecutiveDirector’asprovidedbytheListingRequirementsofBursaSecurities,andsuchdefinitionisusedascriteriaforDirectors’independenceassessment,whichhasbeencarriedoutasatthedateofthisStatement.

TheCompanydoesnothaveanyIndependentNon-ExecutiveDirectorwhohasservedmorethannine(9)yearsasatthedate of this Statement.

TheBoardtakescognisancePractice4.1oftheMCCGwheretheBoardshallcompriseatleasthalfoftheIndependentDirectors,theBoardisoftheviewthatthecurrentcompositionofIndependentNon-ExecutiveDirectorsfairlyreflectstheinterestofminorityshareholdersoftheCompanythroughtheBoard’srepresentation.TheBoardissatisfiedwiththelevelofindependencedemonstratedbytheIndependentNon-ExecutiveDirectorsandtheirabilitytoactinthebestinterestsoftheCompany.

3) Fostering commitment

The Board meets at least four (4) times annually, with the meetings scheduled well in advance before the end of the preceding financial year to facilitate the Directors in managing their meeting plans. Additional meetings are convened when urgent and important decisions need to be made between scheduled meetings.

At the quarterly Board meetings, the Board reviews the business performance of the Group and discusses major operational and financial issues. All pertinent issues discussed at Board meetings in arriving at decisions and conclusions are recorded by the Company Secretaries by way of minutes of meetings. During the financial year under review, the number of Board meetings attended by each Director is as follows:

Name of Director Meeting attended

TanSriDato’SeriAbdullHamidbinEmbong 5/6

Chan Kien Sing 5/6

ColinGeorgeHarvey 6/6

MuhammadLukmanbinMusa@Hussain 6/6

PuanSriDatukSeriRohaniParkashbintiAbdullah 6/6





3) Fostering commitment (cont’d)


Shalet Marian 5/6

TanU-Ming 6/6

TanWaiFoon 4/6

Tsai,Tzung-Han*(Appointed on 16 January 2019) 5/6

HoMeng*(Resigned on 24 October 2019) 4/4

* ReflectstheattendanceandthenumberofmeetingsheldduringthefinancialyearsincetheDirectorheldoffice.

The Board has also stipulated in its Board Charter, the need for Directors to notify the Chairman before accepting new directorships outside the Group and indicating the time that will be spent on the new directorship. Similarly, the Chairman of the Board shall also do likewise, and notify the Board as a whole, before taking up any additional appointment of directorships. ThispracticeistoensurethatDirectorsdevotesufficienttimetomeettheCompany’sneedsandinthedischargeoftheirfiduciary and leadership roles.

The Board is mindful that continuous education is vital for Board members to gain insight into the state of the economy, technologicaladvances,regulatoryupdatesandmanagementstrategiestoenhancetheBoard’sskillsetsandknowledgein discharging its responsibilities.

AllDirectorsappointedtotheBoard,apartfromattendingtheMandatoryAccreditationProgrammeofBursaSecurities,havealso attended other relevant trainings, conferences and seminars organised by relevant regulatory and professional bodies to be apprised of latest developments and changes to regulatory requirements that may affect their roles as Directors of the Company.

The continuous education programmes attended by the Directors as of the date of this Statement, during the financial year ended31December2019comprisethefollowing:

Name of Director Continuous education programmes attended in Year 2019

TanSriDato’SeriAbdullHamid bin Embong

- NIL

Chan Kien Sing - MIAInternationalAccountantsConference2019

ColinGeorgeHarvey - 7-ElevenInternationalBusinessSummit2019

MuhammadLukmanbinMusa@Hussain - MIAInternationalAccountantsConference2019- Anti-BriberyandCorruptionSeminar2019

PuanSriDatukSeriRohaniParkashbintiAbdullah

- PNBLeadershipForum- RevisitingtheMisconceptionofBoardRemunerationbyMarkReid- RingtheBellforGenderEqualityEmpowerWomenforSustainableresults- SustainabilityandBusinessBCSDBreakfastTalkSeries- Corporategovernance(CGWatch)HowDoesMalaysiaRank- TheroleoftheBoardinRiskmanagementofLegalIssuesDuringMergers

and Acquisitions- ShapeAnalystsExpectations:Howtowinoverequityanalysts

Shalet Marian - Let’sGetRealonAnti-Bribery- FIDEElectiveProgramme|UnderstandingFintechandItsImplicationsfor

Insurance Companies- MIAInternationalAccountantsConference2019





3) Fostering commitment (cont’d)

Name of Director Continuous education programmes attended in Year 2019

TanU-Ming - HackingtheDigitalRevolution- YPOChapterLeadershipWorkshop(CLW)2019- MIAInternationalAccountantsConference2019

TanWaiFoon - NACSConvenienceSummitAsia2019- 7-ElevenInternationalBusinessSummit2019

Tsai,Tzung-Han - MandatoryAccreditationProgram(MAP)

The Company Secretaries normally circulate the relevant statutory and regulatory requirements from time to time for the Board’sreferenceandbrieftheBoardontheupdates,whereapplicable.

Part III: Remuneration

1) Directors’ remuneration

TheDirectors’remunerationpaidorpayablefromtheCompanyanditssubsidiariesonthenamedbasisduringthefinancialyearended31December2019categorisedintoappropriatecomponentsareasfollows:-

Company Group

Total(RM)

Fee (RM)

MeetingAllowance

(RM)

Salaries and/or

Bonus*(RM)

Other Emoluments^

(RM)

Benefits-in-kind

(RM)

Executive Directors

ColinGeorgeHarvey - - 1,400,747 - 12,500 1,413,247TanU-Ming - - 723,324 - 6,842 730,166HoMeng (Resigned on 24 October2019)

- - 115,143 487,097 8,250 610,490

Non-Executive DirectorsTanSriDato’SeriAbdullHamid

bin Embong60,000 2,500 - - - 62,500

Chan Kien Sing 60,000 2,500 14,043 60,000 - 136,543Muhammad Lukman bin Musa @ Hussain

72,000 7,500 - - - 79,500

PuanSriDatukSeriRohanibintiAbdullah

60,000 2,500 - - - 62,500

Shalet Marian 60,000 7,500 - - - 67,500TanWaiFoon 60,000 6,500 142,137 1,108,710 17,100 1,334,447Tsai,Tzung-Han 57,581 2,500 - - - 60,081

Total 429,581 31,500 2,395,394 1,655,807 44,692 4,556,974

Notes:-* The salaries and/or bonus are inclusive of employer’s provident fund contributions.^ The other emoluments inclusive of varies allowances, ex-gratia and leave-pay paid to Directors.




Part III: Remuneration (cont'd)

2) Top five (5) Senior Management’s remuneration

Detailsremunerationofthetopfive(5)SeniorManagementarenotdisclosedastheBoardisoftheviewthatitwouldnotbein the best interest of the Company to disclose the aforesaid details in view of the competitiveness in the market for calibre Senior Management staff in the retail industry.

PRINCIPLE B – EFFECTIVE AUDIT AND RISK MANAGEMENT

1) Upholding integrity in financial reporting

It is theBoard’s commitment toprovideandpresent a clear,balancedandcomprehensiveassessmentof theGroup’sfinancialperformanceandprospectsattheendofeachreportingperiodandfinancialyear,primarilythroughthequarterlyannouncementof theGroup’s results toBursaSecurities, theannualauditedfinancialstatementsof theGroupand theCompanyaswellasthereportsoftheBoardandtheChiefExecutiveOfficer’sreviewofoperationsintheAnnualReport.

TheBoardisresponsibleforensuringthatthefinancialstatementsgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyasattheendofthereportingperiodandoftheirresultsandcashflowsfortheperiodthenended.

Toassistinthedischargeofitsdutiesonfinancialreporting,theBoardhasestablishedanAuditCommittee,comprisingwhollyNon-ExecutiveDirectorswithamajorityofIndependentNon-ExecutiveDirectors,chairedbyanIndependentNon-ExecutiveDirector. The composition of the Audit Committee, including its roles and responsibilities, are set out in the Audit Committee Reportonpages68to70ofthisAnnualReport.One(1)ofthekeyresponsibilitiesoftheAuditCommitteeinitsspecifictermsofreferenceistoensurethatthefinancialstatementsoftheGroupandtheCompanycomplywiththeapplicableapprovedfinancialreportingstandardsinMalaysiaandprovisionsoftheCompaniesAct2016.SuchfinancialstatementscomprisethequarterlyfinancialreportannouncedtoBursaSecuritiesandtheannualstatutoryfinancialstatements.

None of the Audit Committee members was a former key audit partner of the Company and the Board would consider establishingawrittenpolicythatrequiresaformerkeyauditpartnertoobserveacooling-offperiodofatleasttwo(2)yearsbefore being appointed as a member of the Audit Committee when the Board reviews the term of reference of the Audit Committee in due course.

Allmembersof theAuditCommittee have the relevant accounting and/or related financial experience andexpertise toeffectivelydischargetheirduties.ThequalificationandexperienceoftheindividualAuditCommitteememberaredisclosedintheDirectors’ProfileinthisAnnualReport.

TheDirectorsaresatisfiedthatinpreparingthefinancialstatementsoftheGroupandtheCompanyforthefinancialyearended31December2019,theGrouphasusedappropriateaccountingpoliciesandappliedthemconsistently.TheDirectorsarealsooftheviewthatrelevantapplicableapprovedfinancialreportingstandardshavebeenfollowedinthepreparationofthesefinancialstatements.

TheBoard understands its role in upholding the integrity of financial reporting by theCompany.Accordingly, theAuditCommittee,whichassiststheBoardinoverseeingthefinancialreportingprocessoftheCompany,hasformalisedaNon-AuditServicesPolicygoverningthetypesofnon-auditservicespermittedtobeprovidedbytheExternalAuditors.Toaddressthe threats facedby theExternalAuditors, includingself-reviewandself-interest threats in relation to the independenceandobjectivityoftheExternalAuditors,theNon-AuditServicesPolicyprovidesforsafeguardswhichmaybeconsidered,includinghavinganengagementteamdifferentfromtheExternalAuditteamtoprovidethenon-auditservices.

InassessingtheindependenceofExternalAuditors,theAuditCommitteeobtainsconfirmationfromtheExternalAuditors,indicating that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants.

TheAuditCommittee, after due deliberation, has recommended the re-appointment ofMessrs. Ernst &YoungPLT astheExternalAuditors for thefinancial yearending31December2020.TheBoardat itsmeetingheldon22April2020approvedtheAuditCommittee’srecommendation.There-appointmentofMessrs.Ernst&YoungPLTwillbepresentedforshareholders’approvalattheforthcomingSeventhAGM.



PRINCIPLE B - EFFECTIVE AUDIT AND RISK MANAGEMENT (CONT'D)

2) Recognising and managing risks

The Board regards risk management and internal controls as an integral part of the overall management processes. As such, the Board has established an Enterprise Risk Management (“ERM”) framework to identify and manage significant risksfacedintheGroup’soperations.FortheeffectiveimplementationofERM,aRiskManagementCommittee,headedbytheChiefExecutiveOfficer,hasbeenestablished,comprisingkeymanagementpersonnelfromtherespectivedivisions.TheRisk Management Committee is tasked to report to the Audit Committee on key risks identified and the implementation of action plans to mitigate the risks. The Board is apprised, via the Audit Committee and the Risk Management Committee, of theGroup’sriskprofile,includingactionplanstoaddressthesignificantrisks.

TheBoardhasoutsourceditsinternalauditfunctiontoaprofessionalfirm,namelyKPMGManagement&RiskConsultingSdn. Bhd. The internal audit function reports directly to the Audit Committee on the adequacy and effectiveness of the system of internal controls. The internal audit function is independent of the Company, Board and Management. The scope of works covered by the internal audit function for the financial year under review is furnished in the Audit Committee Report assetoutonpages70to72ofthisAnnualReport.Theinternalauditcarriedoutbytheinternalauditfunctionisguidedbyinternal auditing standards promulgated by the Institute of Internal Auditors Inc., a globally recognised professional body for internal auditors. The cost incurred on the internal audit function for the financial year under review was amounted to approximatelyRM80,000.00.

PRINCIPLE C - INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

1) Ensuring timely and high quality disclosure

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to be made to the regulators, shareholders and stakeholders. Accordingly, as of the date of this Statement, the Board has formalised pertinent corporate disclosure policies and procedures to streamline information disclosure practices.

It isalsorequiredoftheDirectorsandemployees,whoareinpossessionofprice-sensitive informationontheCompanywhich are not publicly available, and who deal in the securities of the Company, to notify the Company within a specific timeframe as prescribed by the Listing Requirements of Bursa Securities.

TheCompany’s corporatewebsite atwww.7eleven.com.my serves as a key communication channel for shareholders,investors,membersofthepublicandotherstakeholderstoobtainup-to-dateinformationontheGroup’sactivities,financialresults,majorstrategicdevelopmentsandothermattersaffectingstakeholders’interests.

TheBoardhasearmarkedadedicatedsectionforinvestorrelationsontheCompany’swebsite,whereinformationontheCompany’sannouncementstotheregulators,theBoardCharter,rightsofshareholders,andtheCompany’sAnnualReportmay be accessed.

2) Strengthening relationship between the Company and its shareholders

The AGM of the Company serves as the principal forum that provides opportunities for shareholders to raise questions pertaining to issues in the Annual Report, audited financial statements, and corporate developments in the Group, the resolutionsbeingproposedandconcernsovertheGroup’sbusinesses,totheBoardforclarification.TheChairmanaswellastheChiefExecutiveOfficer,andtheExternalAuditors,ifsorequired,willrespondtoshareholders’questionsduringtheAGM.

PursuanttotheListingRequirementsofBursaSecurities,anyresolutionsetoutinthenoticeofanygeneralmeeting,orinany notice of resolution which may properly be moved and is intended to be moved at any general meeting, must be voted bypoll.Hence,votingforalltheresolutionsassetoutintheforthcomingandfuturegeneralmeetingswillbeconductedassuch. An independent scrutineer will be appointed to validate the votes cast at the general meetings.



PRINCIPLE C - INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS(CONT’D)

2) Strengthening relationship between the Company and its shareholders (cont'd)

Adequatenoticeperiod for theAGMofnot lessthantwenty-eight (28)days iscommunicatedtoall theshareholderstoenable them to go through the Annual Report and papers supporting the resolutions proposed.

TheBoardrecognisestheimportanceofbeingtransparentandaccountabletotheCompany’sinvestors.TheCompanywillhold group and individual discussions with analysts, institutional shareholders, and investment communities, at their request, with the view to fostering greater understanding of the business of the Group. The various channels of communications are through the quarterly announcements on the financial results to Bursa Securities, relevant announcements and circulars, whennecessary,theAnnualandExtraordinaryGeneralMeetingsandthroughtheGroup’swebsiteatwww.7eleven.com.my where shareholders can access corporate information, Annual Reports, press releases, financial information, and the Company’sannouncements.Tomaintainahighleveloftransparencyandtoeffectivelyaddressanyissueorconcern,theGrouphasadedicatedelectronicmail,i.e.ir@7eleven.com.mytowhichstakeholderscandirecttheirqueriesorconcerns.

ThisCorporateGovernanceOverviewStatementwasapprovedbytheBoardofDirectorsoftheCompanyon22April2020.



STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL

The Board of Directors (the “Board”) of 7-ElevenMalaysia Holdings Berhad (“7-Eleven” or the “Company”) is committed tomaintaining a sound system of risk management and internal control in the Group (comprising the Company and its subsidiaries) and is pleased to provide the following Risk Management and Internal Control Statement (the “Statement”), which outlines the natureandscopeofriskmanagementandinternalcontroloftheGroupforthefinancialyearended31December2019.Forthepurpose of disclosure, the Board has taken into consideration the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (the “Guidelines”), a publication issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) ontheissuanceofRiskManagementandInternalControlStatementpursuanttoParagraph15.26(b)oftheMainMarketListingRequirements of Bursa Securities.

BOARD RESPONSIBILITY

The Board recognises the importance of maintaining a sound system of internal control and the proper identification andmanagementofrisksaffectingtheGroup’soperationsinordertosafeguardshareholders’ investments.Accordingly,theBoardaffirmsitsoverallresponsibilityfortheGroup’ssystemofriskmanagementandinternalcontrol,andforreviewingtheadequacyandoperatingeffectivenessofthesaidsystem.Thesystemcoversnotonlyfinancialbutoperationalandcompliancerisksandthe relevant controls designed to manage the said risks. In view of the limitations inherent in any system of risk management andinternalcontrol,thesystemisdesignedtomanage,ratherthaneliminate,theriskoffailuretoachievetheGroup’scorporateobjectives. The system can, therefore, only provide reasonable, but not absolute assurance, against material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

TheBoardbelievesthatriskmanagementisvitaltotheGroup’soperationalsustainabilityandtheenhancementofshareholders’value.TheEnterpriseRiskManagement(“ERM”)frameworkfortheGroup,focusesontheGroup’scorebusinessoperationsandprimarily comprised the following:

• Aformalisedstructuredprocessonriskidentification,evaluation,controls,monitoringandreporting;and• RiskmanagementpolicyandguidelineswhichhavebeenadoptedbytheBoard.

TheGrouphasestablishedaRiskManagementCommittee (“RMC”),chairedbytheChiefExecutiveOfficerwith the followingterms of reference:

• communicatingtheBoard’svision,strategy,policy,responsibilitiesandreportinglinesonriskmanagementtotheGroup’spersonnel;

• identifyingandcommunicatingtotheBoard,thecriticalriskstheGroupfaces,theirchangesandManagement’sactionplansto address the risks;

• performingriskoversightactivitiesandreviewingtheriskprofileoftheGroupaswellasorganisationalperformance;• reportingonaquarterlybasistotheBoardontherisksituationsandstatus;• settingperformancemeasuresfortheGroupinsofarasriskmanagementisconcerned;and• providingguidancetothebusinessdivisionsontheGroup’sriskappetiteandothercriteriawhich,whenexceeded,trigger

an obligation to report upward to the RMC and Board.

Duringthefinancialyearunderreview,theRMCMeetingheldatotalof12meetingstoassessandevaluaterisksthatmayimpedethe Group from achieving its objectives, as well as develop action plans to mitigate such risks. On a quarterly basis, the RMC will update the Audit Committee and the Board of Directors on the risk management activities.



INTERNAL CONTROL FRAMEWORK

ThekeyelementsoftheGroup’sinternalcontrolframeworkaredescribedbelow:

(a) Limits of authority and responsibility

A process of hierarchical reporting has been established which provides for a documented trail of accountability. This includesclearlydefinedlinesandlimitsofauthority,responsibilityandaccountabilitywhichhavebeenestablishedthroughtheGroup’sorganisationalstructuresandauthoritylimits,includingspecificmattersrequiringtheBoard’sapproval;and

(b) Planning, monitoring and reporting

The following internal control processes have been established:

• StrategicBusinessPlanningProcesses AppropriatebusinessplansaredevelopedwheretheGroup’sbusinessobjectives,strategiesandtargetsarearticulated

to the Board. Business planning and budgeting are undertaken annually to establish plans and targets against which performance is monitored on an ongoing basis;

• DocumentedPoliciesandProcedures Internal policies and procedures, which are set out in standard operating manuals, covering core operational areas of

the Group, are maintained to streamline activities and are subject to review as considered necessary;

• PerformanceMonitoringandReporting

The Group’s management team monitors and reviews the Group’s financial and operational performance on amonthly basis, including monitoring and reporting of performance against the operating plans. The management team formulates and communicates action plans to address areas of concern;

• FinancialPerformanceReview

The quarterly and annual results of the Group are reviewed by the Audit Committee which recommends to the Board forapprovalbeforereleaseofthesametotheregulatorswhilstthefullyearfinancialstatementsareauditedbytheExternalAuditorsbeforetheirissuancetotheregulatorsandshareholders;

• SafeguardingofAssets

SufficientinsurancecoverageandphysicalsafeguardsovermajorassetsoftheGroupareinplacetoensurethattheassets are adequately insured against calamities and/ or theft that may result in material losses to the Group.

ThisinternalcontrolframeworkhasbeeninplaceforthefinancialyearunderreviewanduptothedateofapprovalofthisStatement for inclusion in the Annual Report of the Company.



INTERNAL AUDIT FUNCTION

TheGroupoutsourceditsinternalauditfunctiontoanindependentprofessionalfirm,KPMGManagement&RiskConsultingSdnBhd(KPMG),toassesstheadequacyandintegrityoftheGroup’ssystemofinternalcontrol.Theinternalauditorsexecutetheinternalauditbasedonarisk-basedinternalauditplanapprovedbytheAuditCommitteebeforecommencementofwork.ItsscopeofworkcoverstheassessmentoftheadequacyandintegrityoftheGroup’ssystemofinternalcontrolforselectedprocesses.

Forthefinancialyearunderreview,theinternalauditorsconductedonecycleofaudit,focusingonkeyrisksandinternalcontrolsrelating Store Operations, and reported directly to the Audit Committee on improvement measures pertaining to internal controls, includingfollowuponthestatusofManagement’simplementationofrecommendationsraisedinpreviousreports.ThereportsweretabledtotheAuditCommittee,whoreviewedtheobservations,includingManagement’sactionplanstoaddresstheconcernsraisedbytheinternalauditors.TheleadindividualinchargeoftheengagementisMohdKhaidzirShahari,CharteredAccountant,MalaysianInstituteofAccountants;CertifiedGlobalManagementAccountant;CertifiedInternalAuditor,TheInstituteofInternalAuditorsInc;andCharteredMember,InstituteofInternalAuditorsMalaysia.Atotalof6personnelweredeployedbyKPMGfortheinternalauditworkduringthefinancialyearended31December2019.

Theexternalauditors’managementletterswhichincorporatedManagement’scommentsprovidedassurancethatmattersrelatingtocontrolproceduresonfinancialreportinghavebeenbroughttotheattentionoftheAuditCommittee.

TheGroupalsohasanin-houseinternalauditteamthatcarriesoutoperationalaudittoassesstheextentofcompliancewiththeGroup’soperationsmanualbypersonnel.ObservationsraisedarereportedtotheChiefExecutiveOfficer,includingactionplansdevised by operations management.

InaddressingtheadequacyandoperatingeffectivenessoftheGroup’ssystemofriskmanagementandinternalcontrol,theAuditCommitteereportstotheBoarditsactivities,significantresults,findingsandthenecessaryrecommendationsforimprovement.

ADEQUACY AND EFFECTIVENESS OF THE GROUP’S RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

The Board has received assurance in writing from the Chief Executive Officer and Executive Director that the Group’s riskmanagementandinternalcontrolsystemsareoperatingadequatelyandeffectively,inallmaterialaspects,forthefinancialyearunder review and up to the date of approval of this Statement for inclusion in the Annual Report of the Company.

BOARD’S COMMENTARY ON THE SYSTEM OF RISK MANAGEMENT AND INTERNAL CONTROL

The Board is of the view that there has been no material breakdown or weakness in the system of risk management and internal controloftheGroupforthefinancialyearended31December2019thatmayresultinasignificantlosstotheGroup.TheBoardcontinuestotakepertinentmeasurestoimprovetheGroup’sriskmanagementandinternalcontrolsysteminmeetingtheGroup’sstrategic objectives.

LIMITED ASSURANCE PROCEDURES PERFORMED ON THE STATEMENT BY EXTERNAL AUDITORS

Theexternalauditors,MessrsErnst&Young,haveperformedlimitedassuranceproceduresonthisStatementonRiskManagementandInternalControlforinclusionintheAnnualReportof7-Elevenfortheyearended31December2019andhavereportedtothe Board that nothing had come to their attention that caused them to believe that this Statement is not prepared, in all material respects, in accordance with the disclosure required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is this Statement factually inaccurate.

ThisStatementismadeinaccordancewitharesolutionoftheBoarddated8May2020.


AUDIT COMMITTEE REPORT

In line with the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board has established an Audit Committee to assist the Board in discharging its statutory duties and responsibilities relating toaccountingandreportingpractices.ThetermsofreferenceofAuditCommitteeispubliclyavailableontheCompany’swebsiteatwww.7eleven.com.my.

COMPOSITION AND MEETING ATTENDANCE

ThecompositionoftheAuditCommitteeandtheattendanceofitsmembersatthesix(6)meetingsheldduringthefinancialyearended31December2019areasfollows:


MuhammadLukmanbinMusa@Hussain,Chairman(IndependentNon-ExecutiveDirector) 6/6

ShaletMarian,member(IndependentNon-ExecutiveDirector) 6/6

TanWaiFoon,member(Non-IndependentNon-ExecutiveDirector) 5/6

MEMBERSHIP

The Member of the Audit Committee were appointed by the Board from amongst the Directors and shall comprise no fewer thanthree(3)members,allofwhommustbeNon-ExecutiveDirectorswithamajorityofthembeingIndependentNon-ExecutiveDirectors.

Throughoutthefinancialyear2019anduptothedateofthisReport,theAuditCommitteecomprisestwo(2)DirectorswhoarethememberoftheMalaysianInstituteofAccountants,theyareEncikMuhammadLukmanbinMusa@HussainandMs.ShaletMarian.ThiscompositionfulfillstheListingRequirements,whichstipulatethatatleastone(1)memberoftheAuditCommitteemustbeamemberoftheMalaysianInstituteofAccountantsor,alternatively,aDirectorwhohasatleastthree(3)yearsworkingexperienceandhaspassedtheexaminationsspecifiedinPartIoftheFirstScheduleoftheAccountantsAct,1967orisamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthesaidScheduleorfulfilssuchotherrequirementsasprescribedor approved by Bursa Securities. The members of the Audit Committee have also elected Encik Muhammad Lukman bin Musa @ HussainastheChairmanwhoisanIndependentNon-ExecutiveDirector.

Duringtheyearunderreview,theNominatingCommitteehadreviewedthetermsofofficeandperformanceoftheAuditCommitteeandeachofitsmembers,andwassatisfiedwiththeperformanceoftheAuditCommitteeandnotedthateachofthemembershave carried out their duties and responsibilities in accordance with the terms of reference of the Audit Committee.

SUMMARY OF WORK OF AUDIT COMMITTEE

ThesummaryofworkcarriedoutbytheAuditCommitteeduringthefinancialyearunderreviewisasfollows: (a) Financial Reporting

• reviewedtheannualauditedfinancialstatementsandprincipalmattersarisingfromauditwiththeExternalAuditors.The key areas of focus were as follows:

- anychangeinorimplementationofaccountingpoliciesandpractices; - significantadjustmentsarisingfromtheaudit; - goingconcernassumption; - compliancewithaccountingstandardsandotherlegalrequirements; - significantmattershighlightedinthefinancialstatements;and - significantjudgementsmadebytheManagement.

• reviewedtheunauditedquarterlyfinancialresultsbeforerecommendingthesametotheBoardforconsiderationandapproval for release to Bursa Securities;

• reviewedtheBudgetforthefinancialyearended31December2019andproposedtotheBoardforapproval;• reviewedtheAuditCommitteeReportandStatementonRiskManagementandInternalControlforinclusionintothe

AnnualReport2018;and



• ThedatestheAuditCommitteemeetingheldduringthefinancialyeartodeliberateonfinancialreportingmattersasdetailed below:

Date of meeting Financial Reporting/Statements Reviewed

14January2019 ReviewtheBudgetoftheGroupforthefinancialyearended31December2019

25February2019 Unaudited quarterly report on consolidated results of the Company and its Group of Companiesforthefourthquarterended31December2018

17April2019 AuditedFinancialStatementsforthefinancialyearended31December2018,AuditCommittee Report and Statement on Risk Management and Internal Control for the Board’sapprovalanddisclosureintheCompany’sAnnualReport2018

27May2019 Unaudited quarterly report on consolidated results of the Company and its Group of Companiesforthefirstquarterended31March2019

27August2019 Unaudited quarterly report on consolidated results of the Company and its Group of Companiesforthesecondquarterended30June2019

25November2019 Unaudited quarterly report on consolidated results of the Company and its Group of Companiesforthethirdquarterended30September2019

(b) External Audit

• reviewedtheExternalAuditors’auditplanforthefinancialyearended31December2019,includingthekeyareasofaudit emphasis, audit approach and their proposed audit fees;

• reviewed,discussedandassessedallsignificantmattershighlightedbytheExternalAuditorsonfinancialreportingandoperation issues;

• metwiththeExternalAuditorswithoutthepresenceofExecutiveDirectorsandManagementon25February2019and25November2019;and

• reviewedtheindependenceandeffectivenessoftheExternalAuditorsandrecommendedtotheBoardtoproposetoshareholdersonthere-appointmentoftheExternalAuditorsattheAnnualGeneralMeetingoftheCompany.

(c) Internal Audit

Theinternalauditfunctionisoutsourcedtoanindependentprofessionalfirm,namelyKPMGManagement&RiskConsultingSdn. Bhd., which reports directly to the Audit Committee. The internal audit function carried out its work, taking into considerationtheInternationalStandardsfortheProfessionalPracticeofInternalAuditingaspromulgatedbytheInstituteofInternal Auditors, Inc.

During the year, the Audit Committee had undertaken the following in respect of internal audit:

• reviewed all internal audit reports, includingManagement’s responses to the observations raised by the InternalAuditors, and action plans to be implemented by the Management on the issues reported;

• reviewed the outcome of follow-up audits to ascertain the status of implementation by Management on therecommended action plans highlighted in the previous internal audit reports;

• receiptoftheupdatesontheriskmanagementactivitiescarriedoutbytheRiskManagementCommittee,includingtheGroup’sriskprofileforidentification,evaluationandcontrolofprincipalbusinessrisksfacedbytheGroupinoperationsto ensure risks are being managed to acceptable levels based on the risk appetite of the Board;

• reviewedtheincidentsofwhistleblowing;and• reviewedthetheftbyemployeecasesofaboveRM10,000perincident.

Forthefinancialyearended31December2019,theinternalauditfunctionhadcoveredtheareaofstoreoperationsandfollowuponfindingsofpreviousinternalauditreport.Thefollowingactivitieswerecarriedout:

• tabledfortheAuditCommittee’sconsiderationandapprovaloftheinternalauditplanandtheunderlyingscopeofworkbefore commencement of internal audit;

• carriedoutinternalaudittestingontheGroup’scompliancewithitspoliciesandproceduresaswellasrelevantrulesand regulations;

• reviewedandassessedtheadequacyofinternalcontrolsdeployedbyManagementontheareaofcoverageintheinternal audit;



(c) Internal Audit (cont'd)

• reportedtheoutcomeoftheinternalauditbywayofaformalinternalauditreport,highlightingtheobservationsandrecommendationsforManagement’sconsiderationinimprovingtheGroup’sinternalcontrolsystem;and

• followed up and reported the status of implementation by Management on recommendations highlighted in theprevious internal audit reports.

Thecosts incurredforthe internalaudit function inrespectofthefinancialyearended31December2019amountedtoapproximatelyRM80,000.

(d) Related Party Transactions

• reviewedallrecurrentandrelatedpartytransactionswithintheGrouptoensurethesetransactionswereatarm’slengthbasis and in the ordinary course of business; on terms not more favourable than those generally available to the public; and in accordance with the mandate approved by the shareholders;

• reviewedtheproceduresforrecurrentrelatedpartytransactionstoensurethattheprocessandcontrolswereinplace;and

• reviewed the circular to shareholders in relation to the proposed renewal of and new shareholders’mandate forrecurrent related party transactions of a revenue or trading nature.


DIRECTORS’ RESPONSIBILITY STATEMENT ON PREPARATION OF ANNUAL FINANCIAL STATEMENTS

InpreparingtheannualfinancialstatementsoftheGroupandoftheCompany,theDirectorsarecollectivelyresponsibletoensurethat thesefinancialstatementshavebeenpreparedtogiveatrueandfairviewof thestateofaffairsof theGroupandof theCompanyasattheendofthefinancialyearandtheresultsandcashflowsoftheGroupandtheCompanyinaccordancewithapplicableapprovedaccountingstandardsinMalaysia,theprovisionsoftheCompaniesAct2016andtheMainMarketListingRequirements of Bursa Malaysia Securities Berhad.

Inpreparingthefinancialstatementsforthefinancialyearended31December2019setoutonpages74to181ofthisAnnualReport,theDirectorshaveappliedappropriateaccountingpoliciesonaconsistentbasis(exceptasdisclosedinNote2.2oftheFinancialStatements)andmadejudgmentsandestimatesthatarereasonableandprudent.TheBoardalsoconsidersthatrelevantapprovedaccountingstandardshavebeenfollowedandconfirmedthatthefinancialstatementshavebeenpreparedonagoingconcern basis.

The Directors have responsibility for ensuring that proper accounting records are kept which disclose with reasonable accuracy thefinancialpositionoftheGroupandoftheCompanyandwhichenablethemtoensurethatthefinancialstatementscomplywiththeMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

75 Directors’Report

81 Statement by Directors

81 Statutory Declaration

82 IndependentAuditors’Report

89 Statements of Comprehensive Income

90 StatementsofFinancialPosition

93 Statements of Changes in Equity

96 StatementsofCashFlows

98 NotestotheFinancialStatements

FINANCIAL STATEMENTS


DIRECTORS' REPORT 201301028701 (1058531-W)

7-Eleven Malaysia Holdings Berhad (Incorporated in Malaysia)

Directors' report

Principal activities

ResultsGroup Company

RM'000 RM'000

Net profit for the financial year 54,084 5,127

Profit attributable to:Equity holders of the Company 54,058 5,127 Non-controlling interest 26 -

54,084 5,127

Dividends

RM'000In respect of the financial year ended 31 December 2018

Interim single-tier cash dividend of 2.4% on 1,128,890,823# ordinary shares, 27,093 declared on 19 April 2019 and paid on 23 May 2019

Share dividend via distribution of 21,299,101 treasury shares on the basis of 33,013 1 treasury share for every 53 existing ordinary shares#, declared on 19 April 2019 and credited on 23 May 2019

60,106

#

There were no material transfers to or from reserves or provisions during the financial yearother than as disclosed in the statements of changes in equity.

In the opinion of the Directors, the results of the operations of the Group and of the Companyduring the financial year were not substantially affected by any item, transaction or event of amaterial and unusual nature.

The principal activities of the subsidiaries are described in Note 13 to the financial statements.

The principal activity of the Company is investment holding.

The Directors have pleasure in presenting their report together with the audited financialstatements of the Group and of the Company for the financial year ended 31 December 2019.

The amount of dividends paid by the Company since 31 December 2018 were as follows:

Dividends were distributed to the holders of ordinary shares of the Company in issue as at13 May 2019 (being the entitlement date), net of 104,494,000 treasury shares.

1


DIRECTORS' REPORT201301028701 (1058531-W)


Dividends (cont'd.)

^ Number of shares is net of 83,195,000 treasury shares.

Directors

Tan Sri Dato' Seri Abdull Hamid Bin EmbongChan Kien SingColin George Harvey*Muhammad Lukman Bin Musa @ HussainPuan Sri Datuk Seri Rohani Binti Abdullah Shalet MarianTan U-Ming*Tan Wai Foon*Tsai, Tzung-Han (appointed on 16 January 2019)Ho Meng* (resigned on 24 October 2019)

* These Directors are also directors of the Company’s subsidiaries.

Tan Sri Dato' Seri Abdull Hamid bin EmbongPuan Sri Datuk Seri Rohani binti AbdullahShalet Marian

The names of the Directors of the Company in office since the beginning of the financial yearto the date of this report are:

In accordance with Article 99 of the Company's Constitution, the following Directors will retireat the forthcoming Annual General Meeting, and being eligible, offered themselves for re-election:

The Board of Directors do not propose any final dividend for the financial year ended 31December 2019.

On 22 April 2020, the Board of Directors has declared an interim dividend comprising thefollowing:

Single-tier cash dividend of 2.3 sen per ordinary share on 1,150,189,924^ ordinary shares (netof treasury shares) with voting rights

The entitlement date has been fixed on 13 May 2020. The cash dividend is payable on 28 May2020 and will be credited into the entitled depositors' securities accounts maintained withBursa Malaysia Depository Sdn Bhd within 10 market days from the entitlement date.

These dividends will be accounted for in the equity as an approporiation of retained profits inthe financial year ending 31 December 2020.

2


DIRECTORS’ REPORT201301028701 (1058531-W)


Directors (cont'd.)

Dato' Seri Mohd Annuar Bin ZainiDato' Sri Azlan Meah Bin Hj. Ahmed MeahDerek Chin Chee SengNg Ming KiatWong Wai KeongMohamed Shah Bin Kadir (resigned on 31 March 2020)

Directors' benefits

Since the end of the previous financial year, no Director has received or become entitled toreceive a benefit (other than benefits included in the aggregate amount of emolumentsreceived or due and receivable by the Directors or the fixed salary of a full-time employee ofthe Company or its related corporations as shown in Note 6 to the financial statements) byreason of a contract made by the Company or a related corporation with the director or with afirm of which he is a member, or with a company in which he has a substantial financialinterest, except as disclosed in Note 30 to the financial statements.

The names of the Directors of the Company's subsidiaries in office since the beginning of thefinancial year to the date of this report (not including those Directors listed above) are:

Neither at the end of the financial year, nor at any time during that year, did there subsist anyarrangement to which the Company was a party, whereby the Directors might acquire benefitsby means of the acquisition of shares in or debentures of the Company or any other bodycorporate.

During the financial year, the total amount of indemnity coverage and insurance premium paidfor the Directors and officers of the Group and of the Company are RM30,000,000 andRM38,165 respectively.

3


201301028701 (1058531-W)


DRAFT18/05/2020

4

Directors' interests

Name of director 1.1.2019 Acquired Sold 31.12.2019

Direct interest:Ordinary shares of the Company

Chan Kien Sing 101,666 1,918 - 103,584Muhammad Lukman Bin Musa @ Hussain 122,000 2,301 (10,000) 114,301Shalet Marian 203,333 3,836 - 207,169Tan U-Ming 610,000 11,509 - 621,509Tan Wai Foon 101,666 1,918 103,584

Indirect interest:Ordinary shares of the CompanyTsai, Tzung-Han - 210,396,226 - 210,396,226

Treasury shares

During the financial year, the Company distributed share dividend equivalent to 2.9 sen pershare via distribution of 21,299,101 treasury shares on basis of 1 treasury share for every 53existing ordinary shares held.

Details of distribution of treasury shares are disclosed in Note 19 to the financial statements.As at 31 December 2019, the issued and paid up share capital of the Company with votingrights was 1,150,189,924 shares (net of treasury shares).

As at 31 December 2019, the Company held as treasury shares a total of 83,195,000 of its1,233,385,000 issued ordinary shares. Such treasury shares are held at a carrying amount ofRM128,928,000. Details of the treasury shares are disclosed in Note 19 to the financialstatements.

According to the register of Directors’ shareholdings, the interests of Directors in office at theend of the financial year in shares in the Company or its related corporations during thefinancial year were as follows:

Number of ordinary shares

Other than as disclosed above, the other Directors in office at the end of the financial year hadno interest in shares in the Company or its related corporations during the financial year.

DIRECTORS' REPORT


201301028701 (1058531-W)


Other statutory information

(a)

(i)

(ii)

(b)

(i)

(ii)

(c)

(d)

(e) At the date of this report, there does not exist:

(i)

(ii)

(f) In the opinion of the Directors:

(i)

(ii)

Before the statements of comprehensive income and statements of financial position ofthe Group and of the Company were made out, the Directors took reasonable steps:

to ascertain that proper action had been taken in relation to the writing off of bad debtsand the making of provision for doubtful debts and satisfied themselves that all knownbad debts had been written off and that adequate provision had been made fordoubtful debts; and

to ensure that any current assets which were unlikely to realise their values as shownin the accounting records in the ordinary course of business had been written down toan amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances which wouldrender:

no item, transaction or event of a material and unusual nature has arisen in theinterval between the end of the financial year and the date of this report which is likelyto affect substantially the results of the operations of the Group or of the Company forthe financial year in which this report is made.

no contingent or other liability has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year whichwill or may affect the ability of the Group or of the Company to meet its obligationswhen they fall due; and

any contingent liability of the Group or of the Company which has arisen since the endof the financial year.

At the date of this report, the Directors are not aware of any circumstances not otherwisedealt with in this report or financial statements of the Group and of the Company whichwould render any amount stated in the financial statements misleading.

any charge on the assets of the Group or of the Company which has arisen since theend of the financial year which secures the liabilities of any other person; or

At the date of this report, the Directors are not aware of any circumstances which havearisen which would render adherence to the existing method of valuation of assets orliabilities of the Group and of the Company misleading or inappropriate.

it necessary to write off any bad debts or the amount of the provision for doubtfuldebts in the financial statements of the Group and of the Company inadequate to anysubstantial extent; and

the values attributed to the current assets in the financial statements of the Group andof the Company misleading.

5

DIRECTORS’ REPORT


201301028701 (1058531-W)


Auditors

The auditors, Ernst & Young PLT, have expressed their willingness to continue in office.

Auditors' remuneration is as follows:

Group CompanyRM'000 RM'000

Ernst & Young PLT 561 99Other auditors 13 -

574 99

Colin George Harvey Tan U-Ming

Signed on behalf of the Board in accordance with a resolution of the Directors dated 8 May2020.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst &Young PLT, as part of the terms of its audit engagement against claims by third parties arisingfrom the audit for an unspecified amount. No payment has been made to indemnify Ernst &Young PLT for the financial year ended 31 December 2019.

6

DIRECTORS' REPORT


201301028701 (1058531-W)


DRAFT5/18/2020

Statement by directorsPursuant to Section 251(2) of the Companies Act 2016

Colin George Harvey Tan U-Ming

Statutory declarationPursuant to Section 251(1)(b) of the Companies Act 2016

Subscribed and solemnly declared by the abovenamed Wong Wai Keong atKuala Lumpur in the Federal Territoryon 8 May 2020 Wong Wai Keong

Before me,

I, Wong Wai Keong (MIA membership number: 16386), being the officer primarily responsible forthe financial management of 7-Eleven Malaysia Holdings Berhad, do solemnly and sincerelydeclare that the accompanying financial statements set out on pages 89 to 181 are in my opinioncorrect, and I make this solemn declaration conscientiously believing the same to be true and byvirtue of the provisions of the Statutory Declarations Act, 1960.

We, Colin George Harvey and Tan U-Ming, being two of the Directors of 7-Eleven MalaysiaHoldings Berhad, do hereby state that, in the opinion of the Directors, the accompanyingfinancial statements set out on pages 89 to 181 are drawn up in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of thefinancial position of the Group and of the Company as at 31 December 2019 and of theirfinancial performance and cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 8 May 2020.

7

STATEMENT BY DIRECTORSPURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF 7-ELEVEN MALAYSIA HOLDINGS BERHAD (INCORPORATED IN MALAYSIA)

DRAFT5/18/2020

201301028701 (1058531-W)

Independent auditors' report to the members of 7-Eleven Malaysia Holdings Berhad(Incorporated in Malaysia)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of 7-Eleven Malaysia Holdings Berhad, which comprise the statements of financial position as at 31 December 2019 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 89 to 181.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. We have determined that there is no key audit matter to communicate in our report on the financial statements of the Company. The key audit matter for the audit of the financial statements of the Group is described below. This matter was addressed in the context of our audit of the financial statements of the Group as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. For the matter described below, our description of how our audit addressed the matter is provided in that context.

8



201301028701 (1058531-W)

Independent auditors' report to the members of7-Eleven Malaysia Holdings Berhad (cont'd.)(Incorporated in Malaysia)

Key audit matters (cont'd.)

We have fulfilled the responsibilities described in the Auditors' responsibilities for the audit ofthe financial statements section of our report, including in relation to the matter describedbelow. Accordingly, our audit included the performance of procedures designed to respond toour assessment of the risks of material misstatement of the financial statements. The resultsof our audit procedures, including the procedures performed to address the matter below,provide the basis of our audit opinion on the accompanying financial statements.

Recognition of rebates and incentives income from vendors

(Refer to Notes 2.25(g), 3(b)(i) and 15 to the financial statements)

The Group receives various types of allowance in the form of rebates and incentives from itsvendors in connection with the purchase of goods from those vendors. These allowancescontribute significantly to the Group’s profit before tax. During the financial year ended 31December 2019, the Group has recognised rebates and incentives income amounting toRM248,923,000 of which majority has been received and the balance of RM39,280,000 isreceivable as at 31 December 2019. Recognition of rebates and incentives income requiredthe Group’s fulfilment of its obligations under contractual arrangement with vendors. Wefocused on this area because the recognition of rebates and incentives income requires, tosome extent, judgement from management concerning the nature and level of fulfilment ofthe Group’s obligations under the vendor agreements.

We have carried out procedures to understand and test management’s controls around thecompleteness and accuracy of the source data required for the computation of these rebatesand incentives. We also reviewed and agreed the rebates and incentives during the year tocontractual evidence on a sample basis. For the rebates and incentives receivable as at 31December 2019, amounts are either recalculated by us based on contractual terms confirmedby vendors or reconciled to post year-end settlements with vendors. In addition, to evaluatethe reliability of management’s estimates, we reviewed subsequent collections of prior year’srebates and incentives income receivables.

Revenue from contracts with customers and cost of sales

(Refer to Notes 2.25 and 4 to the financial statements)

The Group relies heavily on information technology systems for the processing and recordingof revenue from sale of merchandise goods and the related cost of sales. The informationtechnology systems process large volumes of data which consists of individually low valuetransactions. Accordingly, we identified the recognition of revenue and cost of sales to beareas of audit focus as the magnitude and the high volume of transactions may give rise to ahigher risk of material misstatement relating to timing and the amount of revenue and cost ofsales recognised.

9



10

201301028701 (1058531-W)

Independent auditors' report to the members of 7-Eleven Malaysia Holdings Berhad (cont'd.)(Incorporated in Malaysia)

Key audit matters (cont'd.)

Revenue from contracts with customers and cost of sales (cont'd.)

We involved our information technology specialists to test the operating effectiveness of automated controls over the processing and recording of revenue and cost of sales. We also tested the accuracy of data interface between the Point of Sales system and the general ledger, including the updating of approved product price changes in the system. We also tested the information technology dependent manual and manual controls in place to ensure the completeness and accuracy of revenue and cost of sales recognised. We performed procedures to corroborate the occurrence of revenue by tracing samples of cash receipts to the settlement reports from financial instituitions. In addition, we also performed cut-off procedures to determine if revenue is recorded in the correct accounting period.

Transition from the accounting standard MFRS 117 Leases to MFRS 16 Leases

(Refer to Notes 2.2, 2.8 and 10 to the financial statements)

MFRS 16 Leases becomes effective for annual periods beginning on or after 1 January 2019. The application of the new standard gives rise to a right-of-use assets of RM603,066,000 and a corresponding increase in lease liabilities of RM590,150,000 in the financial statements of the Group. The Group applied the modified retrospective approach for the transition accounting.

The application of this new accounting standard requires judgements to be made in policy elections such as transition approach and practical expedients. The measurement of the right-of-use assets and lease liabilities are based on assumptions such as discount rates and lease terms, including termination and renewal options. The Group implemented new processes (including controls) to identify and process all relevant data to measure the right-of-use assets and the corresponding lease liabilities. These factors, together with the material nature of the balances recorded on application of MFRS 16, are significant to our audit.

Our audit procedures included an evaluation of management’s implementation process, which included obtaining an understanding of the transition approach and practical expedients selected by management and management’s process of ensuring the completeness and accuracy of the lease contracts identified. We corroborated, on a sample basis, the accuracy of the inputs in the lease accounting computation to the underlying lease contracts. We evaluated management’s key assumptions on the discount rates by benchmarking to observable market interest rates for leases of similar terms. We also evaluated the reasonableness of the lease terms, including assessing whether options to renew or terminate the leases are reasonably certain to be exercised. We recalculated the amounts of right of use asset, lease liabilities, interest expenses and amortisation expenses. In addition, we also evaluated the adequacy of the disclosures on the Group’s leases in the financial statements.



201301028701 (1058531-W)


Information other than the financial statements and auditors' report thereon

The directors of the Company are responsible for the other information. The otherinformation comprises the directors’, but does not include the financial statements of theGroup and of the Company and our auditors’ report thereon, which we obtained prior to thedate of this auditors’ report, and the annual report which is expected to be made available tous after the date of this auditors’ report.

Our opinion on the financial statements of the Group and of the Company does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, ourresponsibility is to read the other information identified above and, in doing so, considerwhether the other information is materially inconsistent with the financial statements of theGroup and of the Company or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

If, based on the work we have performed on the other information that we obtained prior tothe date of this auditors’ report, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in thisregard.

When we read the annual report, if we conclude that there is a material misstatement therein,we are required to communicate the matter to the directors of the Company and takeappropriate action.

Responsibilities of directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements ofthe Group and of the Company that give a true and fair view in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act 2016 in Malaysia. The directors are also responsible forsuch internal control as the directors determine is necessary to enable the preparation offinancial statements of the Group and of the Company that are free from materialmisstatement, whether due to fraud of error.

In preparing the financial statements of the Group and of the Company, the directors areresponsible for assessing the Group's and the Company's ability to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless the directors either intend to liquidate the Group or theCompany or to cease operations, or have no realistic alternative but to do so.

11



201301028701 (1058531-W)


Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements ofthe Group and of the Company as a whole are free from material misstatement, whether dueto fraud or error, and to issue an auditors' report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with approved standards on auditing in Malaysia and International Standards onAuditing will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia andInternational Standards on Auditing, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of theGroup and of the Company, whether due to fraud or error, design and perform auditprocedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.

• Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the Group's and the Company's internalcontrol.

• Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of directors' use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Group's or the Company'sability to continue as a going concern. If we conclude that a material uncertainty exists, weare required to draw attention in our auditors' report to the related disclosures in thefinancial statements of the Group and of the Company or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However, future events or conditions maycause the Group or the Company to cease to continue as a going concern.

12


201301028701 (1058531-W)


Auditors' responsibilities for the audit of the financial statements (cont'd.)

• Evaluate the overall presentation, structure and content of the financial statements of theGroup and of the Company, including the disclosures, and whether the financial statementsof the Group and of the Company represent the underlying transactions and events in amanner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of theentities and business activities within the Group to express an opinion on the financialstatements of the Group. We are responsible for the direction, supervision and performanceof the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.

From the matters communicated with the directors, we determine the matter that was of mostsignificance in the audit of the financial statements of the Group and of the Company for thecurrent year and is therefore the key audit matter. We describe this matter in our auditors'report unless law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

13




201301028701 (1058531-W)


Ernst & Young PLT Edwin Joseph Francis202006000003 (LLP0022760-LCA) & AF 0039 No. 03370/05/2020 JChartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia8 May 2020

Other matters

This report is made solely to the member of the Company, as a body, in accordance withSection 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do notassume responsibility to any other person for the content of this report.

14


STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

201301028701 (1058531-W)


Statements of comprehensive incomeFor the financial year ended 31 December 2019

2019 2018 2019 2018Note RM'000 RM'000 RM'000 RM'000

Revenue 4 2,361,058 2,217,049 10,047 61,099Cost of sales (1,620,671) (1,518,432) - -Gross profit 740,387 698,617 10,047 61,099Other operating income 143,059 122,667 - -Selling and distribution expenses (645,850) (642,803) - -Administrative and other

operating expenses (117,333) (94,714) (1,288) (1,022)Profit from operations 5 120,263 83,767 8,759 60,077Finance costs 7 (43,610) (9,908) (3,642) (4,436)Profit before tax 76,653 73,859 5,117 55,641Income tax (expense)/credit 8 (22,569) (22,529) 10 (24)Profit after tax 54,084 51,330 5,127 55,617

Other comprehensive income not to be reclassified to profit or loss in subsequent year:Revaluation of land and buildings 9, 10 1,010 2,513 - -Taxation 26 (193) (2,145) - -Total other comprehensive income (net of taxation) 817 368 - -

Total comprehensive income for the financial year 54,901 51,698 5,127 55,617

Profit after tax attributable to:Equity holders of the Company 54,058 51,307 5,127 55,617Non-controlling interest 26 23 - -

54,084 51,330 5,127 55,617

Total comprehensive income attributable to:Equity holders of the Company 54,875 51,675 5,127 55,617Non-controlling interest 26 23 - -

54,901 51,698 5,127 55,617

Basic/diluted earnings pershare (sen) 37 4.74 4.57

Group Company

The accompanying accounting policies and explanatory notes form an integral part of thefinancial statements.

15


201301028701 (1058531-W)


Statements of financial positionAs at 31 December 2019

Note 2019 2018RM'000 RM'000

AssetsNon-current assetsProperty, plant and equipment 9 338,129 323,982Right-of-use assets 10(a) 608,530 -Investment property 11 - 400Intangible assets 12 29,390 34,289Other investment 14 28,000 1Sundry receivables 15 14,533 33,695

1,018,582 392,367

Current assetsInventories 16 231,330 224,682Sundry receivables 15 75,900 59,770Cash and bank balances 17 96,207 72,548

403,437 357,000Total assets 1,422,019 749,367

Equity and liabilitiesEquity attributable to equity

holders of the CompanyShare capital 18 1,485,138 1,485,138Treasury shares 19 (128,928) (161,941)Capital reorganisation deficit 20 (1,343,248) (1,343,248)Assets revaluation reserve 21 41,969 41,152Retained profits 22 46,985 71,208

101,916 92,309Non-controlling interest 195 169Total equity 102,111 92,478

Non-current liabilitiesProvisions 23 9,804 7,742Borrowings 24 25,200 44,611Lease liabilities 10(b) 530,520 -Contract liabilities 28 4,549 1,520Deferred tax liabilities 26 9,872 18,850

579,945 72,723

Group

16

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2019



201301028701 (1058531-W)


Statements of financial positionAs at 31 December 2019 (cont'd.)

2019 2018Note RM'000 RM'000

Current liabilitiesProvisions 23 529 249Borrowings 24 124,200 127,303Lease liabilities 10(b) 76,592 -Trade payables 27 403,259 345,735Other payables 28 129,449 107,114Contract liabilities 28 2,510 1,699Taxation 3,424 2,066

739,963 584,166Total liabilities 1,319,908 656,889Total equity and liabilities 1,422,019 749,367

Group


17



201301028701 (1058531-W)


Statements of financial positionAs at 31 December 2019 (cont'd.)

2019 2018Note RM'000 RM'000

AssetsNon-current assetInvestments in subsidiary companies, representing total

non-current asset 13 1,402,539 1,402,539

Current assetsSundry receivables 15 42 61,060Tax recoverable 139 1,268Cash and bank balances 17 1,181 1,284

1,362 63,612Total assets 1,403,901 1,466,151

Equity and liabilityEquity attributable to equity

holders of the CompanyShare capital 18 1,485,138 1,485,138Treasury shares 19 (128,928) (161,941)Retained profits 22 2,972 57,951Total equity 1,359,182 1,381,148

Current liabilityOther payables, representing

total current liability 28 44,719 85,003Total equity and liability 1,403,901 1,466,151


Company

18


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STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

201301028701 (1058531-W)


Statements of changes in equityFor the financial year ended 31 December 2019 (cont'd.)

DistributableShare Treasury Retained Total

capital shares profits equityRM'000 RM'000 RM'000 RM'000

(Note 18) (Note 19) (Note 22)

Company

At 1 January 2019 1,485,138 (161,941) 57,951 1,381,148Total comprehensive income for the year - - 5,127 5,127Transaction with ownersDividends on ordinary shares (Note 29),

representing total transaction with owners - 33,013 (60,106) (27,093)At 31 December 2019 1,485,138 (128,928) 2,972 1,359,182

At 1 January 2018 1,485,138 (190,625) 60,998 1,355,511Total comprehensive income for the year - - 55,617 55,617Transaction with ownersDividends on ordinary shares (Note 29),

representing total transaction with owners - 28,684 (58,664) (29,980)At 31 December 2018 1,485,138 (161,941) 57,951 1,381,148

Attributable to equity holders of the Company


Non-distributable

21


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DRAFT5/18/2020

Statements of cash flowsFor the financial year ended 31 December 2019

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Cash flows from operating activitiesCash receipts from customers

and other receivables 2,528,621 2,290,403 17 30 Cash paid to suppliers and employees (2,186,318) (2,178,621) (1,300) (1,000) Cash generated from/(used in) operations 342,303 111,782 (1,283) (970)

Interest paid (7,629) (9,908) (3,642) (4,436) Tax paid (25,955) (19,447) (22) (57) Tax refund 1,198 - 1,161 - Net cash generated from/(used in)

operating activities 309,917 82,427 (3,786) (5,463)

Cash flows from investing activitiesPurchase of property, plant and

equipment (93,774) (35,452) - - Proceeds from disposal of

property, plant and equipment 146 350 - - Purchase of quoted shares (27,177) - - - Acquisition of subsidiary companies (Note 13) - (754) - (24,291) Movement in intercompany balances - - (40,271) 1,416 Dividend income received 124 - 71,000 58,000 Interest received 861 1,008 47 99 Net cash (used in)/generated from investing activities (119,820) (34,848) 30,776 35,224

Cash flows from financing activitiesDividends paid on ordinary shares (27,093) (29,980) (27,093) (29,980) Proceeds from banker's acceptances 205,000 280,200 - - Repayment of banker's acceptances (211,145) (301,000) - - Proceeds from term loan - 18,000 - - Proceeds from revolving credit 20,000 - - - Repayment of term loans (16,071) (11,800) - - Repayment of revolving credit (20,000) - - - Payment of principal portion of lease liabilities (117,032) - - - Repayment of hire purchase and

finance lease liabilities (97) (85) - - Net cash used in financing activities activities (166,438) (44,665) (27,093) (29,980)

Group Company

22

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


201301028701 (1058531-W)


Statements of cash flowsFor the financial year ended 31 December 2019 (cont'd.)

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Net increase/(decrease) in cashand cash equivalents 23,659 2,914 (103) (219)

Cash and cash equivalents at1 January 72,548 69,634 1,284 1,503

Cash and cash equivalents at31 December (Note 17) 96,207 72,548 1,181 1,284

Note:

Group Company


During the year, the dividend income received amounting to RM71,000,000 was offset againstamount due to a subsidiary company. As the transaction did not involve actual cash transfer, theeffect is not separately presented in the statements of cash flows.

23

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


201301028701 (1058531-W)


Notes to the financial statementsFor the financial year ended 31 December 2019

1. Corporate information

2. Summary of significant accounting policies

2.1 Basis of preparation

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are described in Note 13.

There have been no significant changes in the nature of these activities during the financialyear.

7-Eleven Malaysia Holdings Berhad ("the Company") is a public limited liability company,incorporated and domiciled in Malaysia. The registered office of the Company is located at12th Floor, Menara Symphony, No.5, Jalan Prof. Khoo Kay Kim, Seksyen 13, Petaling Jaya,46200 Selangor Darul Ehsan. The principal place of business of the Company is located atLevel 3A, Podium Block, Plaza Berjaya, No.12, Jalan Imbi, 55100 Kuala Lumpur, WilayahPersekutuan.

The financial statements were authorised for issue by the Board of Directors in accordancewith a resolution of the directors on 8 May 2020.

The financial statements of the Group and of the Company are presented in RinggitMalaysia ("RM") and all values are rounded to the nearest thousand ("RM'000") exceptwhen otherwise indicated.

The financial statements of the Group and of the Company have been prepared inaccordance with Malaysian Financial Reporting Standards ("MFRS") as issued by theMalaysian Accounting Standards Board, International Financial Reporting Standards andthe requirements of the Companies Act 2016 in Malaysia.

The financial statements have been prepared on historical cost basis except asdisclosed in the accounting policies below.

24

NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2019



201301028701 (1058531-W)


2. Summary of significant accounting policies (cont'd.)

2.2 Changes in accounting policies

Effective for annualfinancial periods

beginning onDescription or after

Amendments to MFRS 9 Prepayment Features with Negative 1 January 2019Compensation

MFRS 16 Leases 1 January 2019Amendments to MFRS 119 Plan Amendment, Curtailment 1 January 2019 or SettlementAmendments to MFRS 128 Long-term Interests in Associates 1 January 2019

and Joint VenturesAnnual Improvements to MFRS Standards 2015 - 2017 Cycle 1 January 2019(i) Amendments to MFRS 3 : Business Combinations 1 January 2019(ii) Amendments to MFRS 11 : Joint Arrangements 1 January 2019(iii) Amendments to MFRS 112 : Income Taxes 1 January 2019(iv) Amendments to MFRS 123 : Borrowing Costs 1 January 2019IC Interpretation 23 Uncertainty over Income Tax Treatment 1 January 2019

MFRS 16 Leases

The accounting policies adopted are consistent with those of the previous financial yearexcept on 1 January 2019, the Group and of the Company adopted the following newand amendments to MFRSs and IC Interpretation mandatory for annual financial periodsbeginning on or after 1 January 2019.

MFRS 16 supersedes MFRS 117 Leases, IFRIC 4 Determining whether an Arrangementcontains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating theSubstance of Transactions Involving the Legal Form of a Lease. The standard sets outthe principles for the recognition, measurement, presentation and disclosure of leasesand requires lessees to recognise most leases on the statement on financial position.

Lessor accounting under MFRS 16 is substantially unchanged from MFRS 17. Lessorswill continue to classify leases as either operating or finance leases using similarprinciples as in MFRS 117. Therefore, MFRS 16 does not have an impact for leaseswhere the Company is the lessor.

The adoption of the above pronouncements did not have any significant financial impactto the Group and the Company, except as stated below:

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2.2 Changes in accounting policies (cont'd.)

MFRS 16 Leases (cont'd.)

Leases previously classified as operating leases

•

•

used a single discount rate to a portfolio of leases with reasonably similarcharacteristics;relied on its assessment of whether leases are onerous immediately before the dateof initial application;

The Group and the Company also applied the available practical expedients whereinthey:

The Group and the Company adopted MFRS 16 using the modified retrospectivemethod of adoption with the date of initial application of 1 January 2019. Under thismethod, the standard is applied retrospectively with the cumulative effect of initiallyapplying the standard recognised at the date of initial application. The Group elected touse the transition practical expedient to not reassess whether a contract is, or contains alease at 1 January 2019. Instead, the Group applied the standard only to contracts thatwere previously identified as leases applying MFRS 117 and IFRIC 4 at the date of initialapplication.

The Group and the Company have lease contracts for various items of property, vehiclesand other equipment. Before the adoption of MFRS 16, the Group and the Companyclassified each of its leases at the inception date as either finance lease or an operatinglease. Refer to Note 2.18 for the accounting policy prior to 1 January 2019.

Upon adoption of MFRS 16, the Group and the Company applied a single recognitionand measurement approach for all leases except for short-term leases and leases of low-value assets. Refer to Note 2.8 for the accounting policy beginning 1 January 2019. Thestandard provides specific transition requirements and practical expedients, which havebeen applied by the Group and the Company.

The Group and the Company recognised right-of-use assets and lease liabilities forthose leases previously classified as operating leases, except for short-term leases andleases of low-value assets. The right-of-use assets for most leases were recognisedbased on the carrying amount as if the standard had always been applied, apart fromthe use of incremental borrowing rate at the date of initial application. In some leases,the right-of-use assets were recognised based on the amount equal to the leaseliabilities, adjusted for any related prepaid and accrued lease payments previouslyrecognised. Lease liabilities were recognised based on the present value of theremaining lease payments, discounted using the incremental borrowing rate at the dateof initial application.

26



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MFRS 16 Leases (cont'd)

Leases previously classified as operating leases (cont'd.)

•

•

•

As at As at31 December MFRS 16 1 January

2018 adjustments 2019RM'000 RM'000 RM'000

Group

Non-current assetsRight-of-use assets (a) - 603,066 603,066Property, plant and equipment (a) 323,982 (15,843) 308,139Investment property (a) 400 (400) -

324,382 586,823 911,205Current assetSundry receivables (b) 93,465 (20,920) 72,545

417,847 565,903 983,750Non-current liabilitiesLease liabilities (c) - 590,150 590,150Borrowings (c) 298 (298) -Provisions (d) 7,991 (149) 7,842Deferred tax liabilities (e) 18,850 (5,625) 13,225

27,139 584,078 611,217

Profit attributable to: (f)Equity holders of the Company 92,309 (18,175) 74,134Non-controlling interests 169 - 169

92,478 (18,175) 74,303

excluded the initial direct costs from the measurement of the right-of-use asset atthe date of initial application; and

applied the short-term leases exemptions to leases with lease term that ends within12 months of the date of initial application;

The effect of adoption MFRS 16 as at 1 January 2019 are, as follows:

used hindsight in determining the lease term where the contract contained optionsto extend or terminate the lease.

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MFRS 16 Leases (cont'd)

Based on the above, as at 1 January 2019:

(a)

(b)

(c)

(d)

(e)

(f)

RM'000AssetsOperating lease commitments as at 31 December 2018 17,743Weighted average incremental borrowing rate as at 1 January 2019 5.8%Discounted operating lease commitments as at 1 January 2019 15,409

Add:Lease payments relating to renewal periods not included in operating 574,741

lease commitments as at 31 December 2018

Lease liabilities as at 1 January 2019 590,150

Deferred tax liabilities decreased because of the deferred tax impact of the changesin recognised lease related assets and liabilities.

Retained earnings and non-controlling interests decreased due to the net impact ofthese adjustments.

The lease liabilities as at 1 January 2019 can be reconciled to the operating leasecommitments as at 31 December 2018, as follows:

Prepaid lease payments which were previously classified as other receivables arenow recognised as part of right-of-use assets.

Lease liabilities were recognised and included under financial liabilities. Thisincludes the hire purchase recognised previously under borrowings amounted toRM298,000 that was reclassified to lease liabilities.

Right-of-use assets were recognised and presented separately in the statements offinancial position. This includes the lease assets recognised previously underfinance leases and estimated dismantling costs of RM400,000, RM12,850,000 andRM2,678,000, respectively, that were reclassified from Property, plant andequipment and Investment Property.

The provision of dismantling costs is recognised as part of the right-of-use assets.

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2.3 Standards issued but not yet effective

Effective for annualfinancial periods

beginning onDescription or after

Amendments to MFRS 3: Business Combinations 1 January 2020Amendments to MFRS 7: Financial Instruments: Disclosures 1 January 2020Amendments to MFRS 9: Financial Instruments 1 January 2020Amendments to MFRS 101: Presentation of Financial Statements 1 January 2020Amendments to MFRS 108: Accounting Policies, Changes in 1 January 2020 Accounting Estimates and ErrorsAmendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 1 January 2020Revised Conceptual Framework for Financial Reporting 1 January 2020Amendments to MFRS 101 Presentation of Financial Statements: 1 January 2022 Classification of Liabilities as Current or Non-currentMFRS 17 : Insurance Contracts 1 January 2021

2.4 Basis of consolidation

The Company controls an investee if and only if the Company has all the following:(i)

(ii)(iii)

Subsidiaries are consolidated when the Company obtains control over the subsidiaryand ceases when the Company loses control of the subsidiary. All intra-group balances,income and expenses and unrealised gains and losses resulting from intra-grouptransactions are eliminated in full.

Power over the investee (i.e. existing rights that give it the current ability to direct therelevant activities of the investee);

The consolidated financial statements comprise the financial statements of the Companyand its subsidiaries as at the reporting date. The financial statements of the subsidiariesused in the preparation of the consolidated financial statements are prepared for thesame reporting date as the Company. Consistent accounting policies are applied for liketransactions and events in similar circumstances.

The standards and interpretations that are issued but not yet effective up to the date ofissuance of the Group's and the Company’s financial statements are disclosed below.The Group and the Company intend to adopt these standards, if applicable, when theybecome effective.

Exposure, or rights, to variable returns from its investment with the investee; andThe ability to use its power over the investee to affect its returns.

The adoption of the above standards and interpretations are not expected to have amaterial impact on the financial statements in the period of application.

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2.4 Basis of consolidation (cont'd.)

Reorganisation

(a)

(b)

(c)

Business combination

Changes in the Group’s ownership interests in subsidiaries that do not result in theGroup losing control over the subsidiaries are accounted for as equity transactions. Thecarrying amounts of the Group’s interests and the non-controlling interests are adjustedto reflect the changes in their relative interests in the subsidiaries. The resultingdifference is recognised directly in equity and attributed to owners of the Company.

The Company will consolidate the assets and liabilities of the acquired entities attheir pre-combination carrying amounts. No adjustments are made to reflect fairvalues, or recognise any new assets or liabilities, at the date of the reorganisationthat would otherwise be done under the acquisition method; and

No new goodwill is recognised as a result of the reorganisation. The only goodwillthat is recognised is the existing goodwill relating to the combining entities. Anydifference between the consideration paid/transferred and the equity acquired isreflected within equity as capital reorganisation reserve or deficit.

Business combinations are accounted for using the acquisition method. The cost of anacquisition is measured as the aggregate of the consideration transferred, which ismeasured at acquisition date fair value, and the amount of any non-controlling interestsin the acquiree. For each business combination, the Group elects whether to measurethe non-controlling interests in the acquiree at fair value or at the proportionate share ofthe acquiree's identifiable net assets. Acquisition-related costs are expensed as incurredand included in administrative expenses.

Acquisition of entities under a reorganisation scheme does not result in any change ineconomic substance. Accordingly, the consolidated financial statements of the Companyis a continuation of the acquired entities and is accounted for as follows:

The results of entities are presented as if the reorganisation occurred from thebeginning of the earliest period presented in the financial statements;

When the Group loses control of a subsidiary, a gain or loss calculated as the differencebetween (i) the aggregate of the fair value of the consideration received and the fairvalue of any retained interest and (ii) the previous carrying amount of the assets andliabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss.The subsidiary’s cumulative gain or loss which has been recognised in othercomprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained profits. The fair value of any investmentretained in the former subsidiary at the date control is lost is regarded as the cost oninitial recognition of the investment.

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2.4 Basis of consolidation (cont'd.)

Business combination (cont'd.)

The accounting policy for goodwill is detailed in Note 2.6(a).

Acquisition of non-controlling interests

The Group accounts for all changes in its ownership interest in a subsidiary that do notresult in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assetsbefore and after the change, and any consideration received or paid, is adjusted to oragainst Group reserves.

Any contingent consideration to be transferred by the acquirer will be recognised at fairvalue at the acquisition date. Contingent consideration classified as equity is notmeasured and its subsequent settlement is accounted for within equity. Contingentconsideration classified as an asset or liability that is a financial instrument and withinthe scope of MFRS 9 Financial Instruments , is measured at fair value with the changesin fair value recognised in the statement of profit or loss in accordance with MFRS 9.Other contingent consideration that is not within the scope of MFRS 9 is measured atfair value at each reporting date with changes in fair value recognised in profit or loss.

When the Group acquires a business, it assesses the financial assets and liabilitiesassumed for appropriate classification and designation in accordance with thecontractual terms, economic circumstances and pertinent conditions as at the acquisitiondate. This includes the separation of embedded derivatives in host contracts by theacquiree.

Goodwill is initially measured at cost (being the excess of the aggregate of theconsideration transferred and the amount recognised for non-controlling interests andany previous interest held over the net identifiable assets acquired and liabilitiesassumed). If the fair value of the net assets acquired is in excess of the aggregateconsideration transferred, the Group re-assesses whether it has correctly identified all ofthe assets acquired and all of the liabilities assumed and reviews the procedures used tomeasure the amounts to be recognised at the acquisition date. If the reassessment stillresults in an excess of the fair value of net assets acquired over the aggregateconsideration transferred, then the gain is recognised in profit or loss.

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2.5 Subsidiaries

A subsidiary is an entity over which the Group has all the following:

(i)

(ii)

(iii)

2.6 Intangible assets

(a) Goodwill

Power over the investee (i.e. existing rights that give it the current ability to direct therelevant activities of the investee);

In the Company’s separate financial statements, investments in subsidiaries areaccounted for at cost less impairment losses. On disposal of such investments, thedifference between net disposal proceeds and their carrying amounts is included in profitor loss.

Goodwill is initially measured at cost. Following initial recognition, goodwill ismeasured at cost less accumulated impairment losses. For the purpose ofimpairment testing, goodwill acquired is allocated, from the acquisition date, to eachof the Group’s cash-generating units that are expected to benefit from the synergiesof the combination.

The cash-generating unit to which goodwill has been allocated is tested forimpairment annually and whenever there is an indication that the cash-generatingunit may be impaired, by comparing the carrying amount of the cash-generatingunit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is lessthan the carrying amount, an impairment loss is recognised in profit or loss.Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation withinthat cash-generating unit is disposed of, the goodwill associated with the operationdisposed of is included in the carrying amount of the operation when determiningthe gain or loss on disposal of the operation. Goodwill disposed of in thiscircumstance is measured based on the relative fair values of the operationsdisposed of and the portion of the cash-generating unit retained.

Exposure, or rights, to variable returns from its investment with the investee; and

The ability to use its power over the investee to affect its returns.

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2.6 Intangible assets (cont'd.)

(b) Computer software

2.7 Property, plant and equipment and depreciation

Computer software-in-development are not depreciated as these assets are notavailable for use. Computer software are amortised on a straight-line basis over theestimated useful lives of 10 years when the assets are available for use. Computersoftware are assessed for impairment whenever there is an indication that thecomputer software may be impaired. The amortisation period and the amortisationmethod are reviewed at least at each financial year end. Changes in the expecteduseful life or the expected pattern of consumption of future economic benefitsembodies in the assets is accounted for by changing the amortisation period ormethod, as appropriate, and are treated as changes in accounting estimates. Theamortisation expense on computer software is recognised in profit or loss.

All items of property, plant and equipment are initially recorded at cost. Subsequentcosts are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with themwill flow to the Group, and the cost of the item can be measured reliably. The carryingamount of the replaced part is derecognised. All other repairs and maintenance arecharged to profit or loss during the financial period in which they are incurred.

Land and buildings are measured at fair value less accumulated depreciation andaccumulated impairment losses recognised at the date of revaluation. Valuations areperformed with sufficient frequency to ensure that the carrying amount of a revaluedasset does not differ materially from its fair value.

Computer software acquired separately are measured initially at cost. Followinginitial acquisition, computer software are measured at cost less any accumulatedamortisation and accumulated impairment losses.

Subsequent to recognition, all items of property, plant and equipment are stated at costless accumulated depreciation, except for land and properties, and any accumulatedimpairment losses.

A revaluation surplus is recognised in other comprehensive income and credited to theasset revaluation reserve in equity. However, to the extent that it reverses a revaluationdeficit of the same asset previously recognised in profit or loss, the increase isrecognised in profit or loss. A revaluation deficit is recognised in the statement of profitor loss, except to the extent that it offsets an existing surplus on the same assetrecognised in the asset revaluation reserve.

Gain or loss from derecognition of computer software are measured as thedifference between the net disposal proceeds and the carrying amount of the assetand are recognised in profit or loss when the assets are derecognised.

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2.7 Property, plant and equipment and depreciation (cont'd.)

Buildings 50 years or the duration of the lease, whichever is shorter

Long-term leasehold land The duration of the lease of 99 yearsComputer equipment 5 to 10 yearsOther equipment 7 yearsMotor vehicles 5 yearsFurniture and fittings and 10 years or the duration of the lease, whichever is renovation shorter

2.8 Leases

Depreciation is calculated on a straight-line basis over the estimated useful lives of theassets, as follows:

The Group assesses at contract inception whether a contract is, or contains, a lease.That is, if the contract conveys the right to control the use of an identified asset for aperiod of time in exchange for consideration.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital work-in-progress are also not depreciated as these assets are not available for use.Depreciation of other property, plant and equipment is provided for on a straight-linebasis over its estimated useful lives.

An item of property, plant and equipment is derecognised upon disposal or when nofuture economic benefits are expected from its use or disposal. The difference betweenthe net disposal proceeds, if any, and the net carrying amount is recognised in profit orloss.

The residual values, useful life and depreciation method are reviewed at each reportingdate to ensure that the amount, method and period of depreciation are consistent withprevious estimates and the expected pattern of consumption of the future economicbenefits embodied in the items of property, plant and equipment.

Upon disposal, any revaluation reserve relating to the particular asset being sold istransferred to retained profits.

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2.8 Leases (cont'd.)

(a) As lessee

(i) Right-of-use assets

Property 1 to 15 yearsLeasehold properties 50 to 99 years

(ii) Lease liabilities

The Group applies a single recognition and measurement approach for all leases,except for short-term leases and leases of low-value assets. The Group recogniseslease liabilities to make lease payments and right-of-use assets representing theright to use the underlying assets.

The Group recognises right-of-use assets at the commencement date of thelease. Right-of-use assets are measured at cost, less any accumulateddepreciation and impairment losses, and adjusted for any remeasurement oflease liabilities. The cost of right-of-use assets includes the amount of leaseliabilities recognised, initial direct costs incurred, and lease payments made ator before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the leaseterm and the estimated useful lives of the assets, as follows:

If ownership of the leased asset transfers to the Group at the end of the leaseterm or the cost reflects the exercise of a purchase option, depreciation iscalculated using the estimated useful life of the asset.

At the commencement date of the lease, the Group recognises lease liabilitiesmeasured at the present value of lease payments to be made over the leaseterm. The lease payments include fixed payments (including in-substance fixedpayments) less any lease incentives receivable, variable lease payments thatdepend on an index or a rate, and amounts expected to be paid under residualvalue guarantees. The lease payments also include the exercise price of apurchase option reasonably certain to be exercised by the Group and paymentsof penalties for terminating the lease, if the lease term reflects the Groupexercising the option to terminate. Variable lease payments that do not dependon an index or a rate are recognised as expenses (unless they are incurred toproduce inventories) in the period in which the event or condition that triggersthe payment occurs.

The right-of-use assets are also subject to impairment. Refer to the accountingpolicies in Note 2.10.

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2.8 Leases (cont'd.)

(a) As lessee (cont'd.)

(ii) Lease liabilities (cont'd.)

(iii) Short-term leases and leases of low-value assets

(b) As lessor

In calculating the present value of lease payments, the Group uses itsincremental borrowing rate at the lease commencement date because theinterest rate implicit in the lease is not readily determinable. After thecommencement date, the amount of lease liabilities is increased to reflect theaccretion of interest and reduced for the lease payments made. In addition, thecarrying amount of lease liabilities is remeasured if there is a modification, achange in the lease term, a change in the lease payments such as changes tofuture payments resulting from a change in an index or rate used to determinesuch lease payments or a change in the assessment of an option to purchasethe underlying asset.

The Group's lease liabilities are included in financial liabilities in Note 10.

The Group applies the short-term lease recognition exemption to its short-termleases such as those leases that have a lease term of 12 months or less fromthe commencement date and do not contain a purchase option. It also appliesthe lease of low-value assets recognition exemption to leases of officeequipment that are considered to be low value. The assessment of whether anunderlying asset is of low value is performed on an absolute basis and is notaffected by the size, nature or circumstances of the lessee. Lease payments onshort-term leases and leases of low-value assets are recognised as expense ona straight-line basis over the lease term.

Leases in which the Group does not transfer substantially all the risks and rewardsincidental to ownership of an asset are classified as operating leases. Rentalincome arising is accounted for on a straight-line basis over the lease terms and isincluded in revenue in the statement of comprehensive income due to its operatingnature. Initial direct costs incurred in negotiating and arranging an operating leaseare added to the carrying amount of the leased asset and recognised over the leaseterm on the same basis as rental income. Contingent rents are recognised asrevenue in the period in which they are earned.

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2.9 Investment property

2.10 Impairment of non-financial assets

The Group and the Company assess at each reporting date whether there is anindication that an asset may be impaired. If any such indication exists, or when anannual impairment assessment for an asset is required, the Group makes an estimate ofthe asset’s recoverable amount.

Investment property is land or building held by the Group or held under a finance lease,to earn rental income or for capital appreciation or both. Investment property ismeasured initially at cost, including transaction cost. Subsequent to initial recognition,investment property is stated at fair value, to reflect market conditions at the reportingdate. Gain or loss arising from change in the fair value of investment property is includedin profit or loss in the period in which they arise, including the corresponding tax effect.Fair value is determined based on annual evaluation performed by an accreditedexternal independent valuer.

Investment property is derecognised either when it has been disposed of or when it ispermanently withdrawn from use and no future economic benefit is expected from itsdisposal. The difference between the net disposal proceed and the carrying amount ofthe asset is recognised in profit and loss in the period of derecognition.

When an indication of impairment exists, the carrying amount of the asset is writtendown immediately to its recoverable value. The policy for the recognition andmeasurement of impairment losses is in accordance with Note 2.10.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell andits value in use. For the purpose of assessing impairment, assets are grouped at thelowest levels for which there are separately identifiable cash flows (cash-generatingunits (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated bythe asset are discounted to their present value using a pre-tax discount rate that reflectscurrent market assessments of the time value of money and the risks specific to theasset. Where the carrying amount of an asset exceeds its recoverable amount, theasset is written down to its recoverable amount. Impairment losses recognised in respectof a CGU or groups of CGUs are allocated first to reduce the carrying amount of anygoodwill allocated to those units or groups of units and then, to reduce the carryingamount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss.

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2.10 Impairment of non-financial assets (cont'd.)

2.11 Financial assets

(a) Initial recognition and measurement

An assessment is made at each reporting date as to whether there is any indication thatpreviously recognised impairment losses may no longer exist or may have decreased. Apreviously recognised impairment loss is reversed only if there has been a change in theestimates used to determine the asset’s recoverable amount since the last impairmentloss was recognised. If that is the case, the carrying amount of the asset is increased toits recoverable amount. That increase cannot exceed the carrying amount that wouldhave been determined, net of depreciation, had no impairment loss been recognisedpreviously. Such reversal is recognised in profit or loss.

Financial assets are classified, at initial recognition, and subsequently measured atamortised cost, fair value through other comprehensive income ("OCI"), and fairvalue through profit or loss.

The classification of financial assets at initial recognition depends on the financialasset’s contractual cash flow characteristics and the Group’s business model formanaging them. With the exception of trade receivables that do not contain asignificant financing component or for which the Group has applied the practicalexpedient, the Group initially measures a financial asset at its fair value plus, in thecase of a financial asset not at fair value through profit or loss, transaction costs.Trade receivables that do not contain a significant financing component or for whichthe Group has applied the practical expedient are measured at the transaction pricedetermined under MFRS 15. Refer to the accounting policies in Note 2.25 forRevenue from contracts with customers.

The Group’s business model for managing financial assets refers to how it managesits financial assets in order to generate cash flows. The business model determineswhether cash flows will result from collecting contractual cash flows, selling thefinancial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a timeframe established by regulation or convention in the market place (regular waytrades) are recognised on the trade date, i.e., the date that the Group commits topurchase or sell the asset.

The Group determined the classification of their financial assets as financial assetsat amortised cost (debt instruments) at its initial recognition.

In order for a financial asset to be classified and measured at amortised cost or fairvalue through OCI, it needs to give rise to cash flows that are ‘solely payments ofprincipal and interest (SPPI)’ on the principal amount outstanding. This assessmentis referred to as the SPPI test and is performed at an instrument level.

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2.11 Financial assets (cont'd.)

(b) Subsequent measurement

-

-

-

-

(c) Derecognition

(i)

(ii)

(a)

(b)

Financial assets at amortised cost are subsequently measured using the effectiveinterest method and are subject to impairment. Gains and losses are recognised inprofit or loss when the asset is derecognised, modified or impaired.

The Group’s and the Company's financial assets at amortised cost includes tradeand other receivables (excluding prepayments) and cash and bank balances.

A financial asset (or, where applicable, a part of a financial asset or part of a groupof similar financial assets) is primarily derecognised when:

The rights to receive cash flows from the asset have expired; or

The Group and the Company have transferred their rights to receive cash flowsfrom the asset or have assumed an obligation to pay the received cash flows infull without material delay to a third party under a ‘pass-through’ arrangement;and either:

the Group and the Company has transferred substantially all the risks andrewards of the asset, or

the Group and the Company have neither transferred nor retainedsubstantially all the risks and rewards of the asset, but have transferredcontrol of the asset.

For purposes of subsequent measurement, financial assets are classified in fourcategories:

Financial assets at amortised cost (debt instruments)

Financial assets at fair value through OCI with recycling of cumulative gainsand losses (debt instruments)

Financial assets designated at fair value through OCI with no recycling ofcumulative gains and losses upon derecognition (equity instruments)

Financial assets at fair value through profit of loss

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2.11 Financial assets (cont'd.)

(c) Derecognition (cont'd.)

2.12 Impairment of financial assets

The Group and the Company consider factors if a financial asset in default such as theprobability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments that indicate that the Group and the Company are unlikelyto receive the outstanding contractual amounts in full before taking into account anycredit enhancements held by the Group and the Company. A financial asset is written offwhen there is no reasonable expectation of recovering the contractual cash flows.

For trade receivables, the Group and the Company apply a simplified approach incalculating ECLs. Therefore, the Group and the Company do not track changes in creditrisk, but instead recognises a loss allowance based on lifetime ECLs at each reportingdate.

The Group and the Company recognise an allowance for expected credit losses("ECLs") for all debt instruments not held at fair value through profit or loss. ECLs arebased on the difference between the contractual cash flows due in accordance with thecontract and all the cash flows that the Group and the Company expect to receive,discounted at an approximation of the original effective interest rate. The expected cashflows will include cash flows from the sale of collateral held or other credit enhancementsthat are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been asignificant increase in credit risk since initial recognition, ECLs are provided for creditlosses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increasein credit risk since initial recognition, a loss allowance is required for credit lossesexpected over the remaining life of the exposure, irrespective of the timing of the default(a lifetime ECL).

When the Group and the Company have transferred their rights to receive cashflows from an asset or has entered into a pass-through arrangement, the Group andthe Company evaluate if, and to what extent, the Group and the Company haveretained the risks and rewards of ownership. When the Group and the Companyhave neither transferred nor retained substantially all of the risks and rewards of theasset, nor transferred control of the asset, the Group and the Company continue torecognise the transferred asset to the extent of its continuing involvement. In thatcase, the Group and the Company also recognise an associated liability. Thetransferred asset and the associated liability are measured on a basis that reflectsthe rights and obligations that the Group and the Company have retained.

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2.13 Inventories

2.14 Cash and cash equivalents

2.15 Financial liabilities

(a) Initial recognition and measurement

(b) Subsequent measurement

Loans and borrowings

Inventories comprise trading goods and consumables and are stated at the lower of cost(determined on the weighted average basis) and net realisable value. Cost comprisesthe invoiced value of the inventories and incidental expenses. Net realisable valuerepresents the estimated selling price less estimated costs necessary to make the sale.

Financial liabilities are classified, at initial recognition, as financial liabilities at fairvalue through profit or loss, loans and borrowings, payables, or as derivativesdesignated as hedging instruments in an effective hedge, as appropriate.

After initial recognition, interest-bearing loans and borrowings are subsequentlymeasured at amortised cost using the effective-interest-rate ("EIR") method. Gainsand losses are recognised in profit or loss when the liabilities are derecognised aswell as through the EIR amortisation process.

Cash and cash equivalents include cash on hand and at banks and demand deposits atcall which are subject to an insignificant risk of changes in value.

All financial liabilities are recognised initially at fair value and, in the case of loansand borrowings and payables, net of directly attributable transaction costs.

The Group's financial liabilities include trade and other payables, and loans andborrowings including bank overdrafts.

The Group measures its financial liabilities as loans and borrowings.

Amortised cost is calculated by taking into account any discount or premium onacquisition and fees or costs that are an integral part of the EIR. The EIRamortisation is included as finance costs in the statement of profit or loss.

This category generally applies to interest-bearing loans and borrowings.

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2.15 Financial liabilities (cont'd.)

(c) Derecognition

2.16 Segment reporting

2.17 Share capital and share issuance expenses

2.18 Leases (effective prior to 1 January 2019)

(a) As lessee

A financial liability is derecognised when the obligation under the liability isdischarged or cancelled or expires. When an existing financial liability is replaced byanother from the same lender on substantially different terms, or the terms of anexisting liability are substantially modified, such an exchange or modification istreated as the derecognition of the original liability and the recognition of a newliability. The difference in the respective carrying amounts is recognised in thestatement of profit or loss.

Finance leases, which transfer to the Group substantially all the risks and rewardsincidental to ownership of the leased item, are capitalised at the inception of thelease at the fair value of the leased asset or, if lower, at the present value of theminimum lease payments. Any initial direct costs are also added to the amountcapitalised. Lease payments are apportioned between the finance charges andreduction of the lease liability so as to achieve a constant rate of interest on theremaining balance of the liability. Finance charges are charged to profit or loss.Contingent rents, if any, are charged as expenses in the periods in which they areincurred.

Ordinary shares are recorded at the proceeds received, net of directly attributableincremental transaction costs. Ordinary shares are classified as equity. Dividends onordinary shares are recognised in equity in the period in which they are declared.

For management purposes, the Group is organised into operating segments based ontheir products and services which are independently managed by the respectivesegment managers responsible for the performance of the respective segments undertheir charge. The segment managers report directly to the management of the Groupwho regularly review the segment results in order to allocate resources to the segmentsand to assess the segment performance. Additional disclosure of each of thesesegments are shown in Note 36, including the factors used to identify the reportablesegments and the measurement basis of segment information.

An equity instrument is any contract that evidences a residual interest in the assets ofthe Group and the Company after deducting all of its liabilities. Ordinary shares areequity instruments.

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2.18 Leases (effective prior to 1 January 2019) (cont'd.)

(a) As lessee (cont'd.)

(b) As lessor

2.19 Borrowing costs

2.20 Income tax

Operating lease payments are recognised as an expense in profit or loss on astraight-line basis over the lease term. The aggregate benefit or incentives providedby the lessor is recognised as a reduction of rental expense over the lease term ona straight-line basis.

Leases where the Group retains substantially all the risks and rewards of ownershipof the asset are classified as operating leases. Initial direct costs incurred innegotiating and operating lease are added to the carrying amount of the leasedasset and recognised over the lease term on the same bases as rental income.

All other borrowing costs are recognised in profit or loss in the period they are incurred.Borrowing costs consist of interest and other costs that the Group incurred in connectionwith the borrowing of funds.

Borrowing costs are capitalised as part of the cost of a qualifying asset if they aredirectly attributable to the acquisition, construction or production of that asset.Capitalisation of borrowing costs commences when the activities to prepare the asset forits intended use or sale are in progress and the expenditures and borrowing costs areincurred. Borrowing costs are capitalised until the assets are substantially completed fortheir intended use or sale.

Income tax on the profit or loss for the year comprises current and deferred tax. Currenttax is the expected amount of income taxes payable in respect of the taxable profit forthe year and is measured using the tax rates that have been enacted or substantivelyenacted at the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates toitems recognised outside profit or loss, either in other comprehensive income or directlyin equity.

Leased assets are depreciated over the estimated useful life of the asset. However,if there is no reasonable certainty that the Group will obtain ownership by the end ofthe lease term, the asset is depreciated over the shorter of the estimated useful lifeand the lease term.

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2.20 Income tax (cont'd.)

2.21 Provisions

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilitiesare recognised for all taxable temporary differences and deferred tax assets arerecognised for all deductible temporary differences, unused tax losses and unused taxcredits to the extent that it is probable that taxable profit will be available against whichthe deductible temporary differences, unused tax losses and unused tax credits can beutilised. Deferred tax is not recognised if the temporary difference arises from goodwill orfrom the initial recognition of an asset or liability in a transaction which is not a businesscombination and at the time of the transaction, affects neither accounting profit nortaxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period whenthe asset is realised or the liability is settled, based on tax rates that have been enactedor substantively enacted at the reporting date. Deferred tax is recognised as income oran expense and included in profit or loss for the period, except when it arises from atransaction which is recognised directly in equity, in which case the deferred tax is alsorecognised directly in equity, or when it arises from a business combination that is anacquisition, in which case the deferred tax is included in the resulting goodwill or theamount of any excess of the acquirer’s interest in the net fair value of the acquiree’sidentifiable assets, liabilities and contingent liabilities over the cost of the combination.

Provisions are reviewed at each reporting date and adjusted to reflect the current bestestimate. Where the effect of the time value of money is material, provisions arediscounted using a current pre-tax rate that reflects, where appropriate, the risks specificto the liability. Where discounting is used, the increase in the provision due to thepassage of time is recognised as a finance cost.

As the land and buildings held under property, plant and equipment of the Group iscarried at fair value, the revaluation of the asset does not affect taxable profit in theperiod of the revaluation and, consequently, the tax base of the asset is not adjusted.Nevertheless, the future recovery of the carrying amount will result in taxable flow ofeconomic benefits to the Group and the amount that will be deductible for tax purposeswill differ from the amount of those economic benefits. The difference between thecarrying amount of a revalued asset and its tax base is a temporary difference and givesrise to a deferred tax liability.

Provisions for liabilities are recognised when the Group has present obligations as aresult of past events, it is probable that an outflow of resources embodying economicbenefits will be required to settle the obligation, and a reliable estimate of the amountcan be made.

Deferred tax relating to items recognised outside profit or loss is recognised outsideprofit or loss. Deferred tax items are recognised in correlation to the underlyingtransaction either in other comprehensive income or directly in equity.

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2.22 Employee benefits

(a) Short term benefits

(b) Defined contribution plans

2.23 Foreign currency

(a) Functional and presentation currency

(b) Foreign currency transactions

2.24 Fair value measurement

The individual financial statements of each entity in the Group are measured usingthe currency of the primary economic environment in which the entity operates ("thefunctional currency"). The consolidated financial statements are presented in RinggitMalaysia ("RM"), which is also the Company's functional currency.

Transactions in foreign currencies are measured in the respective functionalcurrencies of the Company and its subsidiary companies and are recorded on initialrecognition in the functional currencies at exchange rates approximating those rulingat the transaction dates. Monetary assets and liabilities denominated in foreigncurrencies are translated at the rate of exchange ruling at the end of the reportingdate.

Exchange differences arising on the settlement of monetary items or on translatingmonetary items at the end of the reporting date are recognised in profit or loss.

Fair value is the price that would be received to sell an asset or paid to transfer a liabilityin an orderly transaction between market participants at the measurement date. The fairvalue measurement is based on the presumption that the transaction to sell the asset ortransfer the liability takes place either:

Wages, salaries, bonuses and social security contributions are recognised as anexpense in the period in which the associated services are rendered by employeesof the Group and the Company. Short term accumulating compensated absencessuch as paid annual leave are recognised when services are rendered byemployees that increase their entitlement to future compensated absences. Shortterm non-accumulating compensated absences such as sick leave are recognisedwhen the absences occur.

As required by law, the Group makes contributions to the state pension scheme, theEmployees Provident Fund ("EPF"). Such contributions are recognised as anexpense in profit or loss as incurred.

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2.24 Fair value measurement (cont'd.)

(a) In the principal market for the asset or liability, or

(b)

(a) Level 1 -

(b) Level 2 -

(c) Level 3 -

2.25 Revenue from contracts with customers and other operating income

Valuation techniques for which the lowest level input that is significantto the fair value measurement is directly or indirectly observable.

Valuation techniques for which the lowest level input that is significantto the fair value measurement is unobservable.

A fair value measurement of a non-financial asset takes into account a marketparticipant's ability to generate economic benefits by using the asset in its highest andbest use or by selling it to another market participant that would use the asset in itshighest and best use.

Quoted (unadjusted) market prices in active markets for identicalassets or liabilities.

The fair value of an asset or a liability is measured using the assumptions that marketparticipants would use when pricing the asset or liability, assuming that marketparticipants act in their economic best interest.

The Group uses valuation techniques that are appropriate in the circumstances and forwhich sufficient data are available to measure fair value, maximising the use of relevantobservable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financialstatements are categorised within the fair value hierarchy, described as follows, basedon the lowest level input that is significant to the fair value measurement as a whole:

In the absence of a principal market, in the most advantageous market for the assetor liability.

The principal or the most advantageous market must be accessible to by the Group.

Revenue from contracts with customers and other operating income is recognised whencontrol of the goods or services are transferred to the customer at an amount thatreflects the consideration to which the Group expects to be entitled in exchange forthose goods or services. The Group has generally concluded that it is the principal in itsrevenue arrangements, except for the agency services for provision of in-store services,because it typically controls the goods or services before transferring them to thecustomer.

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2.25 Revenue from contracts with customers (cont'd.)

(a) Sale of goods

(b) Provision of in-store services income

The Group acts as an agent in providing in-store services to its customers.

(c) Rental income

(d) Interest income

(e) Franchise income

Initial franchise fee

(f) Dividend income

The Group considers whether there are other promises in the contract that areseparate performance obligations to which a portion of the transaction price needsto be allocated (e.g. customer loyalty points).

When another party is involved in providing services to its customers, the Groupdetermines whether it is a principal or an agent in these transactions by evaluatingthe nature of its promise to the customer. When the Group's role is only to arrangefor another entity to provide the services, then the Group is an agent and will needto record revenue at the net amount that it retains for its agency services.

Dividend income is recognised when the Group's right to receive payment isestablished.

Revenue from sale of general merchandise is recognised at the point in time whencontrol of the asset is transferred to the customer. These are in cash consideration.

Income from the rental of property is recognised on an accrual basis in accordancewith the terms of the agreements.

Interest income is recognised on an accrual basis using the effective interestmethod.

Initial franchise fee is recognised on a straight-line basis over the term of thefranchise agreement. The transaction price for franchise agreement is discounted,using the rate that would be reflected in a separate financing transaction betweenthe Group and its customers at contract inception, to take into consideration thesignificant financing component.

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2.25 Revenue from contracts with customers (cont'd.)

(g) Rebates and incentives income

(h) Customer loyalty programme

The Group's loyalty programme allows the customers to collect award credits whenspecified sales terms were fulfilled by the customers. The customers can thenredeem the gifts once the specified number of award credits have been collected.

The Group accounts for the award credits as separately identifiable component ofthe initial sales transactions. The fair value of the consideration received orreceivable in respect of the initial sales is allocated between the fair value of theaward credits and the other components of the sale.

The consideration allocated to the award credits is deferred and subsequentlyrecognised as revenue when the award credits are redeemed. The deferral istreated as a deduction from revenue. The fair value of the award credits isdetermined with reference to the fair value of the gift to the customer and considersthe redemption rate for the award credits.

The Group receives incentives and rebates from suppliers for various programs,primarily volume incentives, prompt payment discounts and central distributioncentre rebates ("CDC rebates"). Rebates are recognised to statements ofcomprehensive income when the Group achieved the volume-purchase targets, theperformance obligations for central distribution arrangement, and promotionalprograms have been fulfilled by the Group in accordance with the terms asstipulated in the trade agreements with vendors. These rebates and discounts arerecognised as deduction against costs of goods sold when the goods are sold andfor the CDC rebates only, when goods are delivered to the stores. Rebates anddiscounts for unsold goods and CDC rebates in respect of goods not delivered tothe stores yet, are deducted against inventories and shall be recognised to thestatements of comprehensive income when the goods are subsequently sold ordelivered to respective stores.

Other incentives mainly comprised in-store displays and promotions andadvertisements for specific products. Incentives are recognised to the statements ofcomprehensive income when the performance obligations have been fulfilled by theGroup in accordance with the terms as stipulated in the agreements with vendors.These incentives are recognised as other operating income in the statements ofcomprehensive income.

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2.26 Contract balances

Contract assets

Contract liabilities

2.27 Treasury shares

2.28 Current versus non-current classification

An asset is classified as current when:

(i)

(ii) it is held primarily for the purpose of trading;

(iii) it is expected to be realised within twelve months after the reporting period; or

(iv)

All other assets are classified as non-current.

The Group recognises contract assets for rebates and incentives income receivable.

A contract liability is the obligation to transfer goods or services to a customer for whichthe Group has received consideration (or an amount of consideration is due) from thecustomer. If a customer pays consideration before the Group transfers goods orservices to the customer, a contract liability is recognised when the payment is made orthe payment is due (whichever is earlier). Contract liabilities are recognised as revenuewhen the Group performs under the contract.

Own equity instruments that are reacquired (treasury shares) are recognised at cost anddeducted from equity. No gain or loss is recognised in profit or loss on the purchase,sale, issue or cancellation of the Company's own equity instruments. Any differencebetween the carrying amount and the consideration, if reissued, is recognised in equity.

The Group and the Company present assets and liabilities in the statements of financialposition based on current/non-current classification.

it is expected to be realised or intended to be sold or consumed in normal operatingcycle;

cash or cash equivalents unless restricted from being exchanged or used to settle aliability for at least twelve months after the reporting period.

A contract asset is the right to consideration in exchange for goods or servicestransferred to the customer. If the Group performs by transferring goods or services to acustomer before the customer pays consideration or before payment is due, a contractasset is recognised for the earned consideration that is conditional.

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2.28 Current versus non-current classification (cont'd.)

A liability is classified as current when:

(i) it is expected to be settled in normal operating cycle;

(ii) it is held primarily for the purpose of trading;

(iii) it is due to be settled within twelve months after the reporting period; or

(iv)

The Group and the Company classify all other liabilities as non-current.

Deferred tax liabilities are classified as non-current assets and liabilities.

3. Significant accounting estimates and judgements

(a) Critical judgements made in applying accounting policies

(i)

In the process of applying the Group’s and the Company's accounting policies,management has made the following judgements, which have the most significant effecton the amounts recognised in the financial statements:

The preparation of the Group’s financial statements in accordance with MFRS requiresmanagement to make judgements, estimates and assumptions that affect the reportedamounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,and the disclosure of contingent liabilities. Uncertainty about these assumptions andestimates could result in outcomes that require a material adjustment to the carrying amountof assets or liabilities affected in future periods.

there is no unconditional right to defer the settlement of the liability for at leasttwelve months after the reporting period.

Determining the lease term of contracts with renewal and termination optionsas lessee

The Group determines the lease term as the non-cancellable term of the lease,together with any periods covered by an option to extend the lease if it is reasonablycertain to be exercised, or any periods covered by an option to terminate the lease,if it is reasonably certain not to be exercised.

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3. Significant accounting estimates and judgements (cont'd)

(a) Critical judgements made in applying accounting policies (cont'd)

(i)

(b) Key sources of estimation uncertainty

(i) Recognition of incentives and rebates

(ii) Revaluation of property, plant and equipment

Determining the lease term of contracts with renewal and termination optionsas lessee (cont'd.)

Certain incentives and rebates recognised in profit or loss were estimated based onterms and rates in trade agreements entered into with suppliers. Actual amountsreceived from suppliers could differ from the amounts initially estimated. As at thereporting date, the Group has recognised incentives and rebates receivable ofRM39,280,000 (2018: RM27,178,000).

The key assumptions concerning the future and other key sources of estimationuncertainty at the reporting date, that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the next financial yearare described below:

The Group carries its freehold and leasehold land and buildings at fair value, withchanges in fair value being recognised in other comprehensive income. The Groupengaged an independent valuation specialist to assess fair value as at 31 December2019 and 31 December 2018.

The Group applies judgement in evaluating whether it is reasonably certain whetheror not to exercise the option to renew or terminate the lease. That is, it considers allrelevant factors that create an economic incentive for it to exercise either therenewal or termination. After the commencement date, the Group reassess thelease term if there is a significant event or change in circumstances that is within itscontrol and affects its ability to exercise or not to exercise the option to renew or toterminate such as the construction of significant leasehold improvements orsignificant customisation to the leased asset.

The Group included the renewal period as part of the lease term for leases withshorter non-cancellable period such as three to five years. The Group typicallyexercise its option to renew for these leases because there will be a significantnegative effect on production if a replacement asset is not readily available.

The Group receives rebates and incentives from suppliers for various programs,primarily volume incentives, display and promotional incentives, prompt paymentdiscounts and warehouse rebates.

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3. Significant accounting estimates and judgements (cont'd.)

(b) Key sources of estimation uncertainty (cont'd.)

(ii) Revaluation of property, plant and equipment (cont'd.)

(iii) Estimating the incremental borrowing rate to measure lease liabilities

4. Revenue from contracts with customers

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Type of goods or servicesSale of merchandise goods 2,284,451 2,143,891 - -Provision of in-store services - Commission income 74,738 71,964 - -Dividend income from a subsidiary - - 10,000 61,000Franchise income 1,659 950 - -Interest income - - 47 99Rental income 210 244 - -

2,361,058 2,217,049 10,047 61,099

Timing of revenue recognitionGoods or services - transferred at a point in time 2,359,189 2,215,855 10,000 61,000 - transferred over time 1,869 1,194 47 99

2,361,058 2,217,049 10,047 61,099

Company

Fair value adjustments and the key assumptions used to determine the fair value ofthe properties and sensitivity analysis are provided in Note 9 for freehold propertiesand Note 10 for leasehold properties.

Group

The Group cannot readily determine the interest rate implicit in the lease, therefore,it uses its incremental borrowing rate ("IBR") to measure lease liabilities. The IBR isthe rate of interest that the Group would have to pay to borrow over a similar term,and the funds necessary to obtain an asset of a similar value to the right-of-useasset in a similar economic environment. The IBR therefore reflects what the Group‘would have to pay’, which requires estimation when no observable rates areavailable or when they need to be adjusted to reflect the terms and conditions of thelease. The Group estimates the IBR using observable inputs such as marketinterest rates when available and is required to make certain entity-specificestimates.

The freehold and leasehold land and buildings were valued by reference to market-based evidence, using comparable price adjusted for specific market factors suchas nature, location and condition of the properties.

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5. Profit from operations

Profit from operations is arrived at after charging/(crediting):

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Auditors' remuneration - Statutory audit - current 506 510 86 88 - Other services 68 28 13 13Depreciation of property, plant and equipment 59,427 59,164 - -Depreciation of right-of-use assets 95,015 - - -Amortisation of intangible assets 4,518 4,679 - -Property, plant and equipment written off 4,517 2,467 - -Impairment loss on sundry receivables (Note 15) 2,550 621 - -Impairment of goodwill (Note 12) 381 - - -Bad debts written off for

sundry receivables 7,338 - - -Write off of inventories 11,433 4,482 - -Short term lease expense/

rental of premises 3,154 113,389 - -Royalty 23,617 22,195 - -Employee benefits expense (Note 6(a)) 348,632 322,191 - -Directors' benefits (Note 6(b)) 4,595 3,589 499 432Loss on disposal of property, plant and equipment 382 168 - -Loss on foreign exchange translation differences 181 6 - -Bad debts recovered for

sundry receivables (161) - - -Dividend income (124) - - -Interest income - fixed deposits and overnight placements (861) (1,008) (47) (99)Fair value changes of FVTPL for investments in quoted shares (822) - - -Rental income (217) (173) - -Reversal of impairment loss of

sundry receivables (Note 15) (4,750) - - -

CompanyGroup

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6. Employee benefits expense and directors' remuneration

(a) Employee benefits expense

2019 2018RM'000 RM'000

Wages, salaries and other emoluments 299,363 276,750Pension costs - defined contribution plans 30,659 28,957Social security costs and employees insurance 5,733 5,438Other staff benefits 12,877 11,046

348,632 322,191

(b) Directors' benefits

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Salaries and other emoluments 1,800 1,308 - -Fees 430 367 430 367Bonus 210 83 - -Defined contribution plan 385 299 - -Estimated money value of benefits-in-kind 45 45 - -Allowance 1,687 1,448 31 26Insurance effected to indemnify directors 38 39 38 39

4,595 3,589 499 432

Group

The Directors' remuneration paid or payable from the Company and its subsidiariesduring the financial year ended 31 December 2019 categorised into appropriatecomponents are as follows:

Group Company

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7. Finance costs

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Interest expense on: Lease liabilities 35,784 - - - Hire purchase liabilities 24 7 - - Bankers' acceptances 1,463 3,198 - - Revolving credit 3,006 3,351 - - Term loans 3,135 3,333 - - Overdraft interest 1 19 - - Unwinding of discount on sundry receivables 197 - - - Amount due to a subsidiary company - - 3,642 4,436

43,610 9,908 3,642 4,436

8. Income tax expense/(credit)

(a) Income statements

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Income tax:Current year 26,888 26,031 - 24Over provision in

prior year (773) (771) (10) -26,115 25,260 (10) 24

Deferred tax (Note 26):Relating to origination

and reversal of temporary differences (4,537) (1,548) - -

Under/(over) provision in prior year 991 (1,183) - -

(3,546) (2,731) - -22,569 22,529 (10) 24

Company

Company

Group

Group

Income tax is calculated at the Malaysian statutory tax rate of 24% (2018: 24%) of theestimated assessable profit for the year.

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8. Income tax expense/(credit) (cont'd.)

(a) Income statements (cont'd.)

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Profit before tax 76,653 73,859 5,117 55,641

Taxation at Malaysian statutory tax rate of 24% (2018: 24%) 18,397 17,726 1,228 13,354Expenses not deductible under tax legislation 4,181 6,757 1,172 1,310Income not subject to tax (227) - (2,400) (14,640)Under provision of income

tax in prior year (773) (771) (10) -Under/(over) provision of deferred tax in prior year 991 (1,183) - -Tax expense/(credit) for the

year 22,569 22,529 (10) 24

(b) Other comprehensive income

2019 2018RM'000 RM'000

Deferred tax related to item recognised in othercomprehensive income during the year:

Deferred tax liability recognised in respect of netgain on revaluation of land and buildings 193 2,145

A reconciliation of income tax expense applicable to profit before tax at the statutory incometax rate to income tax expense at the effective tax rate of the Group and of the Company isas follows:

Company

Group

Group

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60



201301028701 (1058531-W)


9. Property, plant and equipment (cont'd.)

*Land and buildings

Long termFreehold leasehold

land Buildings land TotalRM'000 RM'000 RM'000 RM'000

Group

At 31 December 2019

ValuationAt 1 January 2019 59,530 11,799 9,350 80,679Effect of adoption of MFRS 16 - (3,500) (9,350) (12,850)At 1 January 2019 (restated) 59,530 8,299 - 67,829Revaluation adjustment

recognised in othercomprehensive income(Note 9 (d)) 355 333 - 688

Transfer^ - (228) - (228)At 31 December 2019 59,885 8,404 - 68,289

Accumulated depreciationAt 1 January 2019 - - - -Depreciation charge for the year - 228 - 228Transfer^ - (228) (228)At 31 December 2019 - - - -

Net carrying amountAt 31 December 2019 59,885 8,404 - 68,289

61



201301028701 (1058531-W)



*Land and buildings (cont'd.)

Long termFreehold leasehold

land Buildings land TotalRM'000 RM'000 RM'000 RM'000

Group

At 31 December 2018

ValuationAt 1 January 2018 58,160 11,429 9,100 78,689Disposal - (250) - (250)Revaluation adjustment

recognised in othercomprehensive income(Note 9 (d), 10) 1,370 730 413 2,513

Transfer^ - (360) (163) (523)Acquisition of a subsidiary

company (Note 13) - 250 - 250At 31 December 2018 59,530 11,799 9,350 80,679

Accumulated depreciationAt 1 January 2018 - - - -Depreciation charge for the year - 360 163 523Transfer^ - (360) (163) (523)At 31 December 2018 - - - -

Net carrying amountAt 31 December 2018 59,530 11,799 9,350 80,679

(a)

(b)

2019 2018RM'000 RM'000

Cash 93,774 35,452Capitalisation of restoration costs (Note 23) - 339

93,774 35,791

During the financial year, the Group acquired property, plant and equipment by thefollowing means:

Included in property, plant and equipment of the Group are fully depreciated property,plant and equipment which are still in use costing RM279,826,959 (2018:RM262,278,652).

Group

62



201301028701 (1058531-W)



(c)

2019 2018RM'000 RM'000

Equipment - 82Motor vehicles - 247

- 329

(d)

Significant unobservable valuation input:

2019 2018RM RM

Price per square foot for freehold land and buildings 200 - 4,840 200 - 4,840

Net carrying amounts of property, plant and equipment held under hire purchase andfinance lease arrangements (Note 25) are as follows:

Fair value measurement disclosures for the revalued land and buildings are provided inNote 33.

Group

Group

Management determined that the land and buildings constitutes a separate class ofasset under MFRS 13 Fair Value Measurements, based on the nature, characteristicsand risks of the properties.

Fair value of the land and buildings was determined using the market comparablemethod. This means that valuations performed by the valuer are based on active marketprices, adjusted for differences in the nature, location or condition of the specific landand buildings. As at the date of revaluations on 31 December 2019, the land andbuildings' fair value is based on valuations performed by Hartanah Consultants(Valuations) Sdn Bhd, an independent professional valuer specialising in valuing landand buildings of similar nature. A net gain of RM688,000 (2018: RM2,513,000) wasrecognised in other comprehensive income for the financial year ended 31 December2019, as a result of these revaluations.

63



201301028701 (1058531-W)



(d) (cont'd.)

Reconciliation of carrying amount:

2019 2018RM'000 RM'000

Carrying amount and fair value as at 1 January 80,679 78,689Effect of adoption of MFRS 16 (12,850) -At 1 January 2019 (restated) 67,829 78,689Depreciation for the year (228) (523)Level 3 revaluation gain on revaluation as at

31 December 688 2,513Carrying amount and fair value as at 31 December 68,289 80,679

2019 2018RM'000 RM'000

Cost 30,423 30,423Accumulated depreciation (2,680) (2,537)Net carrying amount 27,743 27,886

10. Right-of-use assets and lease liabilities

Group as a Lessee

If the properties were measured using the cost model, the carrying amounts would be,as follows:

The Group has lease contracts for various items of plant, property and equipment used in itsoperations. Leases of property generally have lease terms between 1 and 15 years, whileleasehold property generally have lease terms between 50 and 99 years. The Group’sobligations under its leases are secured by the lessor’s title to the leased assets. There areseveral lease contracts that include extension and termination options and variable leasepayments, which are further discussed below.

* The Group changed its accounting policy with respect to the measurement of land andbuildings as at 1 January 2017 on a prospective basis. Therefore, the fair value of theland and buildings were not measured at 1 January 2017.

Group

Group

Significant increase/(decrease) in estimated price per square foot would result in asignificantly higher/(lower) fair value on a linear basis.

64


201

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019



201301028701 (1058531-W)


10. Right-of-use assets and lease liabilities (cont'd.)

Group as a Lessee (cont'd.)

(a) Right-of-use assets (cont'd.)

(i)

Significant unobservable valuation input:

2019 2018RM'000 RM'000

Price per square foot for:- Leasehold land and buildings 325 - 2,489 336 - 2,489- Investment property 286 286

Management determined that the land and buildings constitutes a separate class ofasset under MFRS 13 Fair Value Measurements, based on the nature,characteristics and risks of the properties.

Fair value of the leasehold properties and investment property were determinedusing the market comparable method. This means that valuations performed by thevaluer are based on active market prices, significantly adjusted for differences in thenature, location or condition of the specific properties. As at the date of revaluationon 31 December 2019 and 31 December 2018, the leasehold properties' fair valuesare based on valuations performed by Hartanah Consultants (Valuations) Sdn Bhd,an independent professional valuer specialising in valuing land and buildings ofsimilar nature. A net gain of RM322,000 (2018:-) was recognised in othercomprehensive income for the financial year ended 31 December 2019, as a resultof these revaluations.

Fair value measurement disclosures for the revalued leasehold properties andinvestment property are provided in Note 33.

Group

Significant increase/(decrease) in estimated price per square foot would result in asignificant higher/(lower) fair value.

66



201301028701 (1058531-W)





(i) (cont'd.)

Leasehold properties

Reconciliation of carrying amount:Group2019

RM'000

Carrying amount and fair value as at 1 January -Effect of adoption of MFRS 16 12,850At 1 January 2019 (restated) 12,850Depreciation for the year (322)Level 3 revaluation gain on revaluation as at 31 December 322Carrying amount and fair value as at 31 December 12,850

2019 2018RM'000 RM'000

Cost 6,400 6,400Accumulated depreciation (1,598) (1,418)Net carrying amount 4,802 4,982

Investment property

The Group's investment property consists of one commercial property.

* If the properties were measured using the cost model, the carrying amounts wouldbe, as follows:

As at 31 December 2019 and 31 December 2018, the fair value of the investmentproperty is based on a valuation performed by Hartanah Consultants (Valuations)Sdn Bhd, an independent professional valuer specialising in valuing these type ofinvestment properties.

Fair value of the investment property was determined using the market comparisonmethod. This means that valuation performed by the valuer is based on activemarket prices, adjusted for differences in the nature, location or condition of thespecific property.

Group

67



201301028701 (1058531-W)





(i) (cont'd.)

Investment property (cont'd.)

Profit arising from leasehold property carried at fair value is as follow:

2019 2018RM'000 RM'000

Rental income derived from leasehold property 7 7Direct operating expenses generating rental income

(included in other operating expenses) (1) (1)Profit arising from investment property carried at

fair value 6 6

(b) Lease liabilities

HireProperty purchase Total

RM'000 RM'000 RM'000At 1 January 2019 - - -Effect of adoption of MFRS 16 (Note 2.2) 589,852 298 590,150At 1 January 2019 (restated) 589,852 298 590,150Additions 106,392 110 106,502Disposal (8,195) - (8,195)Interest expense (Note 7) 35,784 - 35,784Payment of principal (117,032) (97) (117,129)At 31 December 2019 606,801 311 607,112

The maturity analysis of lease liabilities are disclosed in Note 34 (b).

Current liabilities 76,592Non-current liabilities 530,520

607,112

The Group has no restrictions on the realisability of its investment property and nocontractual obligations to purchase, construct or develop investment properties orfor repairs, maintenance and enhancements.

Set out below are the carrying amounts of property and hire purchase and themovements during the year:

Group

68



201301028701 (1058531-W)




(b) Lease liabilities (cont'd.)

Hire purchase

2019 2018RM'000 RM'000

Future minimum lease payments:Not later than 1 year 115 105Later than 1 year and not later than 2 years 91 96Later than 2 years and not later than 5 years 124 112Later than 5 years 23 23

353 336Less: Future finance charges (42) (38)

311 298

Analysis of present value of finance lease payables:Current 98 87

Non-current: Later than 1 year and not later than 2 years 213 211

311 298

Hire purchase and finance lease liabilities

Property

The following are the amounts recognised in profit or loss:

2019RM'000

Depreciation expense of right-of-use assets 95,015Interest expense on lease liabilities 35,784Unwinding of discount on sundry receivables 197Variable lease payments (117,032)Total amount recognised in profit or loss 13,964

Charge over a subsidiary's equipment and motor vehicles of RM339,000 (2018:RM329,000) acquired by means of hire purchase and finance lease liabilities, asdisclosed in Note 9(c).

Group

The future cash outflows relating to leases that have not yet commenced are disclosedin Note 31(b).

69



201301028701 (1058531-W)


11. Investment property

2019 2018RM'000 RM'000

Leasehold land and building

At fair valueAt 1 January 2019 400 400Effect of adoption of MFRS 16 (Note 2.2) (400) -As at 1 January 2019 (restated)/ 31 December - 400

The Group's investment property consists of one commercial property.

12. Intangible assets

Goodwill on Computerconsolidation software Total

RM'000 RM'000 RM'000

At 31 December 2019

CostAs at 1 January/31 December 381 46,012 46,393

Accumulated amortisation/impairmentAt 1 January 2019 - 12,104 12,104Impairment of goodwill 381 - 381Amortisation (Note 5) - 4,518 4,518At 31 December 2019 381 16,622 17,003

Net carrying amountAt 31 December 2019 - 29,390 29,390

Group

Group

70



201301028701 (1058531-W)


12. Intangible assets (cont'd.)

Goodwill on Computerconsolidation software Total

RM'000 RM'000 RM'000At 31 December 2018

CostAt 1 January 2018 - 42,358 42,358Reclassified from property, plant and equipment (Note 9) - 3,654 3,654Acquisition of a subsidiary company (Note 13) 381 - 381At 31 December 2018 381 46,012 46,393

Accumulated amortisationAt 1 January 2018 - 7,060 7,060Reclassified from property, plant and equipment (Note 9) - 365 365Amortisation (Note 5) - 4,679 4,679At 31 December 2018 - 12,104 12,104

Net carrying amountAt 31 December 2018 381 33,908 34,289

Goodwill with infinite useful life - Impairment testing

(a) Allocation of goodwill

(b) Key assumptions used in value-in-use calculations

Group

The recoverable amount of the CGU is determined based on value-in-use calculationusing cash flow projections.

Goodwill arises from the acquisition of a subsidiary, Café Decoral Sdn. Bhd., by theGroup. Goodwill is allocated to food service cash-generating unit ("CGU").

71



201301028701 (1058531-W)


13. Investments in subsidiary companies

2019 2018RM'000 RM'000

Unquoted shares, at costAt 1 January 1,402,539 1,378,248Acquisition of shares in Convenience Shopping (Sabah) Sdn. Bhd. ("CSSSB") (Note 13(i)(a)) - 2,291Acquisition of shares in Teluk Juara Sdn. Bhd. ("TJSB") (Note 13(i)(b)) - 15,000Acquisition of shares in 7 Properties Sdn. Bhd. ("7PSB") (Note 13(i)(b)) - 7,000

1,402,539 1,402,539

(i) Changes in the group structure in the previous financial year

(a)

(b)

(i)

(ii)

On 7 September, 2018 the Company has undertaken an internal reorganisation asfollows:-

7,000,000 new ordinary shares, representing 70.0% equity interest in theenlarged share capital of 10,000,000 ordinary shares in 7PSB, for a cashconsideration of RM7,000,000.

15,000,000 new ordinary shares, representing 83.3% equity interest in theenlarged share capital of 18,000,000 ordinary shares in TJSB for a cashconsideration of RM15,000,000; and

the subscriptions by the Company of:

the acquisition by the Company of the entire 2,000,000 ordinary shares in CSSSB,representing 100% of the issued and paid-up share capital of CSSSB from its wholly-owned subsidiary, 7-Eleven Malaysia Sdn. Bhd. (“7EMSB”), for a cash considerationof RM2,291,000; and

Company

72



201301028701 (1058531-W)


13. Investments in subsidiary companies (cont'd.)

Business combination

Acquisition in 2018

Assets acquired and liabilities assumed

GroupFair value

recognisedon acquisition

RM'000AssetsProperty, plant and equipment (Note 9) 712Receivables 1,344Inventories 132

2,188

LiabilitiesPayables (1,045)Borrowings (Note 24) (580)Provision for tax (40)Deferred tax liability (4)Cash and cash equivalents (154)

(1,823)Total identifiable net assets at fair value 365

Non-controlling interest measured at fair value (146)Goodwill arising on acquisition (Note 11) 381Purchase consideration transferred 600

Analysis of cash flows on acquisition:Purchase consideration settled in cash (included in cash flows from investing activities) (600)Bank overdraft assumed (included in cash flows from investing activities) (154)Net cash flow on acquisition (754)

On 28 April 2018, CSSSB, the Group's 100%-owned subsidiary company, proposedacquisition of 123,004 ordinary shares, representing 60% equity interest in Café Decoral Sdn.Bhd. (a non-listed entity) for a total cash consideration of RM600,000. The acquisition wascompleted on 28 September 2018 and Café Decoral Sdn. Bhd. became an indirect subsidiaryof the Company.

73



201301028701 (1058531-W)


13. Investments in subsidiary companies (cont'd.)

Details of the subsidiary companies are as follows:

Name of Country ofcompany incorporation 2019 2018 Principal activity

Held by the Company:

7-Eleven Malaysia Malaysia 100% 100% Operating and franchising Sdn. Bhd. of convenience stores

under the "7-Eleven"brand name

Convenience Malaysia 100% 100% Investment holding company Shopping (Sabah) Sdn. Bhd.

7 Properties Malaysia 70% 70% Real property investments Sdn. Bhd.

Teluk Juara Malaysia 83.3% 83.3% Real property investments Sdn. Bhd.

Held through 7-Eleven Malaysia Sdn. Bhd.:

7 Properties Malaysia 30% 30% Real property investments Sdn. Bhd.

Teluk Juara Malaysia 16.7% 16.7% Real property investments Sdn. Bhd.

Held through Convenience Shopping (Sabah) Sdn. Bhd. :

Café Decoral Malaysia 60% 60% Supply food stuff Sdn. Bhd.^

^ Audited by a firm other than Ernst & Young

Equity interest

74



201301028701 (1058531-W)


14. Other investment

2019 2018RM'000 RM'000

Financial asset at fair value through profit or loss

Non-currentUnquoted shares in MalaysiaAt 1 January/31 December 1 1

Quoted shares in MalaysiaAt 1 January - -Additions 27,177 -Fair value changes of FVTPL for investments in quoted shares 822 -At 31 December 27,999 -

28,000 1

15. Sundry receivables

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Non-currentDeposits 14,533 33,695 - -

CurrentOther receivables 46,862 31,159 1 1Deposits 9,794 9,055 5 5Prepayments 15,207 14,774 36 54Dividend receivable from a subsidiary company - - - 61,000Due from other related parties 4,481 7,426 - -Less: Allowance for impairment on other receivables (444) (2,644) - -Total current sundry receivables 75,900 59,770 42 61,060Total non-current and current

sundry receivables 90,433 93,465 42 61,060

Group Company

Group

75



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15. Sundry receivables (cont'd.)

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Total sundry receivables 90,433 93,465 42 61,060Less: Prepayments (15,207) (14,774) (36) (54)

75,226 78,691 6 61,006Add: Cash and bank

balances (Note 17) 96,207 72,548 1,181 1,284Financial assets at amortised cost 171,433 151,239 1,187 62,290

(a) Receivables

Receivables that are impaired

2019 2018RM'000 RM'000

Individually impairedOther receivables - nominal amounts 444 2,644Less: Allowance for impairment (444) (2,644)

- -Movement in allowance accounts:

At 1 January 2,644 2,023Charge for the financial year 2,550 621Reversal of impairment losses (4,750) -At 31 December 444 2,644

Receivables, other than amounts due from a subsidiary company, are unsecured, non-interest bearing and repayable upon demand. They are recognised at their originalamounts which represent their fair values on initial recognition.

CompanyGroup

Other receivables that are individually determined to be impaired at the reporting daterelate to debtors that are in significant financial difficulties and have defaulted onpayments.

Included in sundry receivables is an amount of RM39,280,000 (2018: RM27,178,000),comprising of rebates and incentives income receivable from vendors. These rebates andincentives have been estimated based on terms in trade agreements entered into withvendors.

The receivables of the Group's that are impaired at the reporting date and the movementof the allowance accounts used to record the impairment are as follows:

Group

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15. Sundry receivables (cont'd.)

(b) Due from other related parties

2019 2018RM'000 RM'000

Refundable deposits (Non-trade in nature) 1,557 860

Deposit for acquisition of property (Non-trade in nature) 2,853 -

Advertising income - Revenue sharing (Trade in nature) - 2,872

Display fees from placement of the Sun newspaper(Trade in nature) - 3,488

Deposit for in-store space rent - 206

Receiving variance 54 -

BCard Point Redemption 17 -

Amounts due from other related parties are unsecured, non-interest bearing and arerepayable upon demand. Included in amount due from other related parties are asfollow:

Group

77



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16. Inventories

2019 2018RM'000 RM'000

At cost:General merchandise held for resale 228,725 221,709Consumables 2,605 2,973

231,330 224,682

Cost of inventories recognised as an expense during the financial year 1,620,671 1,518,432

17. Cash and bank balances

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Cash on hand and at banks 95,309 71,430 283 166Short term deposits with licensed banks 898 1,118 898 1,118

96,207 72,548 1,181 1,284

2019 2018 2019 2018Days Days Days Days

Deposits with licensed banks 2 2 2 2

Group Company

The remaining days to maturity of deposits as at the end of the financial year were as follows:

Included in cash on hand and at banks of the Group is overnight placements with licensedbanks amounted to RM48,597,157 (2018: RM16,066,837), with interest ranging from 1.50%to 3.00% (2018: 1.50% to 3.00%) per annum.

Group

Company

As at the reporting date, the interest rate of short term deposits of the Group and theCompany was 2.70% (2018: 3.00%) per annum.

Group

78



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18. Share capital

Number of Number ofordinary ordinary

shares Amount shares Amount'000 RM'000 '000 RM'000

Issued and fully paid upAt 1 January/31 December 1,233,385 1,485,138 1,233,385 1,485,138

19. Treasury shares

Number of Number ofordinary ordinary

shares Amount shares Amount'000 RM'000 '000 RM'000

At 1 January 104,494 161,941 123,000 190,625Distribution as dividend during the year (21,299) (33,013) (18,506) (28,684)At 31 December 83,195 128,928 104,494 161,941

2019

20182019Group and Company

Treasury shares relate to ordinary shares of the Company that are held by the Company. Theamount consists of the acquisition costs of treasury shares.

2018

The Directors of the Company are committed to enhance the value of the Company for itsshareholders and believe that the repurchase plan can be applied in the best interests of theCompany and its shareholders. The repurchase transactions were financed by internallygenerated funds and held as treasury shares.

The holders of ordinary shares are entitled to receive dividends as and when declared by theCompany. All ordinary shares, net of treasury shares, carry one vote per share withoutrestrictions and rank equally with regard to the Company's residual assets.

Group and Company

79


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20. Capital reorganisation deficit

2019 2018RM'000 RM'000

Capital reorganisation deficitAt 1 January/31 December (1,343,248) (1,343,248)

21. Assets revaluation reserve

2019 2018RM'000 RM'000

Revaluation of land and buildings classified as property, plant & equipment (Note 9)As 1 January 47,509 44,996Increase in fair value 1,010 2,513At 31 December 48,519 47,509

Deferred taxation (Note 26)As 1 January (6,357) (4,212)Provision during the year (193) (2,145)At 31 December (6,550) (6,357)

Total asset revaluation reserve, net of tax 41,969 41,152

22. Retained profits

Capital reorganisation deficit represents the difference between the purchase considerationpaid to acquire 7-Eleven Malaysia Sdn Bhd (“7EMSB”) and the equity interest of 7EMSBbeing acquired.

Group

The asset revaluation reserve represents increases in the fair value of land and buildings, netof tax.

Group

The Company may distribute dividends out of its entire retained profits under the single tiersystem.

80




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23. Provisions

2019 2018RM'000 RM'000

At 1 January 7,991 7,677Effect of adoption of MFRS 16 (149) -At 1 January (restated) 7,842 7,677Provisions during the year (Note 10(a)) 2,733 339Utilised during the year (151) (25)Unwinding of discount on provisions (91) -At 31 December 10,333 7,991

At 31 December

Current 529 249

Non-current: Later than 1 year but not later than 2 years 633 448 Later than 2 years but not later than 5 years 2,126 2,030 Later than 5 years 7,045 5,264

9,804 7,74210,333 7,991

24. Borrowings

2019 2018RM'000 RM'000

CurrentSecured:Hire purchase and finance lease liabilities (Note 25)At 1 January 2019 87 87Effect of adoption of MFRS 16 (Note 2.2) (87) -At 1 January 2019 (restated) - 87

Unsecured:Bankers' acceptances 45,000 51,145Term loan 19,200 16,071Revolving credit 60,000 60,000Total current borrowings 124,200 127,303

Provisions represent the estimated costs of dismantlement, removal or restoration ofproperty, plant and equipment arising from the use of such assets, which are capitalised andincluded in the right-of-use assets.

Group

Group

81



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24. Borrowings (cont'd.)

2019 2018RM'000 RM'000

Non-currentSecured:Hire purchase and finance lease liabilities (Note 25)At 1 January 2019 211 211Effect of adoption of MFRS 16 (Note 2.2) (211) -At 1 January 2019 (restated) - 211

Unsecured:Term loan 25,200 44,400Total non-current borrowings 25,200 44,611

Total borrowingsBankers' acceptances 45,000 51,145Term loan 44,400 60,471Revolving credit 60,000 60,000Hire purchase and finance lease liabilities (Note 25) - 298Total current and non-current borrowings 149,400 171,914

2019 2018RM'000 RM'000

At 31 DecemberCurrent: Not later than 1 year 124,200 127,216

Non-current: Later than 1 year but not later than 2 years 19,200 19,200 Later than 2 years but not later than 5 years 6,000 25,200

25,200 44,400149,400 171,616

Group

Group

The remaining maturities of the borrowings as at 31 December 2019 and 31 December 2018,other than hire purchase and finance lease liabilities as disclosed in Note 25, are as follows:

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019



201301028701 (1058531-W)


24. Borrowings (cont'd.)

Borrowings are secured by the followings:

Other information on financial risks of borrowings are disclosed in Note 34(b).

25. Hire purchase

2019 2018RM'000 RM'000

At 1 January 2019 298 298Effect of adoption of MFRS 16 (Note 2.2) (298) -At 1 January 2019 (restated) - 298

Future minimum lease payments:Not later than 1 year - 105Later than 1 year and not later than 2 years - 96Later than 2 years and not later than 5 years - 112Later than 5 years - 23

- 336Less: Future finance charges - (38)

- 298

Analysis of present value of finance lease payables:Current - 87

Non-current: Later than 1 year and not later than 2 years - 211

- 298

26. Deferred tax liabilities

2019 2018RM'000 RM'000

As at 1 January 18,850 19,436Effect of adoption of MFRS 16 (5,625) -As at 1 January 2019 (restated) 13,225 19,436Recognised in profit or loss (Note 8(a)) (3,546) (2,731)Recognised in other comprehensive income (Note 8(b)) 193 2,145As at 31 December 9,872 18,850

Group

Corporate guarantee is given by the Company to its subsidiary for bankers' acceptance, termloan and revolving credit.

Group

84



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26. Deferred tax liabilities (cont'd.)

Presented after appropriate offsetting as follows:

2019 2018RM'000 RM'000

Deferred tax asset (12,301) (4,041)Deferred tax liabilities 22,173 22,891

9,872 18,850

Deferred tax assetRight-of-use

assets Provisions TotalRM'000 RM'000 RM'000

Group

At 1 January 2019 - (4,041) (4,041)Effect of adoption of MFRS 16 (5,625) - (5,625)At 1 January 2019 (restated) (5,625) (4,041) (9,666)Recognised in profit or loss (2,740) 105 (2,635)At 31 December 2019 (8,365) (3,936) (12,301)

At 1 January 2018 - (4,764) (4,764)Recognised in profit or loss - 723 723At 31 December 2018 - (4,041) (4,041)

Deferred tax liabilities

RevaluationProperty, of land and Fair value ofplant and buildings to investment

equipment fair value property TotalRM'000 RM'000 RM'000 RM'000

Group

At 1 January 2019 16,488 6,357 46 22,891Recognised in profit or loss (911) - - (911)Recognised in other

comprehensive income(Note 8(b)) - 193 - 193

At 31 December 2019 15,577 6,550 46 22,173

Group

The components and movements of deferred tax asset and liabilities during the financial yearprior to offsetting are as follows:

85



201301028701 (1058531-W)


26. Deferred tax liabilities (cont'd.)

Deferred tax liabilities (cont'd.)

RevaluationProperty, of land and Fair value ofplant and buildings to investment

equipment fair value property TotalRM'000 RM'000 RM'000 RM'000

Group

At 1 January 2018 19,942 4,212 46 24,200Recognised in profit or loss (3,454) - - (3,454)Recognised in other

comprehensive income(Note 8(b)) - 2,145 - 2,145

At 31 December 2018 16,488 6,357 46 22,891

27. Trade payables

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

CurrentThird parties (a)Merchandise suppliers 316,827 248,005 - -Phone reload coupon and in-store services suppliers 58,328 45,484 - -

Related parties (b)Merchandise suppliers 1,531 - - -Phone reload coupon and in-store services suppliers 26,573 52,246 - -Total trade payables 403,259 345,735 - -

Total trade payables 403,259 345,735 - -Add:

Lease liabilities (Note 10(b)) 607,112 - - -Other payables (Note 28) 129,449 107,114 44,719 85,003Borrowings (Note 24) 149,400 171,914 - -

Total financial liabilities, carried at amortised cost 1,289,220 624,763 44,719 85,003

Group Company

86



201301028701 (1058531-W)


27. Trade payables (cont'd.)

(a) Third parties

2019 2018RM'000 RM'000

Merchandise suppliers 30 - 60 30 - 60Phone reload coupon and in-store services suppliers 7 - 60 7 - 60

(b) Related parties

28. Other payables and contract liabilities

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Other payables:CurrentSundry payables 57,243 43,716 - 17Accruals 51,003 45,554 138 132Refundable deposits 21,203 17,844 - -Due to a subsidiary company - - 44,581 84,854Total other payables 129,449 107,114 44,719 85,003

Contract liabilities:Current and non-currentInitial franchise fees 5,710 2,470 - -Loyalty points programme 1,349 749 - -Total contract liabilities 7,059 3,219 - -

The normal trade credit terms granted to the Group ranged from 7 to 60 (2018: 7 to 60)days. However, suppliers will generally extend their credit terms to 90 (2018: 90) daysupon request by the Group.

As at 31 December 2018, related parties refer to MOL AccessPortal Sdn. Bhd. ("MOL")and U Mobile Sdn. Bhd. ("U Mobile"), companies in which TSVT is deemed to have aninterest. The trade credit terms granted by MOL and U Mobile ranged from 7 to 60(2018: 7 to 60) days.

As at 31 December 2019, related party refers to U Mobile Sdn. Bhd. ("U Mobile"), acompany in which TSVT is deemed to have an interest. The trade credit term granted byU Mobile ranged from 7 to 60 (2018: 7 to 60) days.

CompanyGroup

The normal trade credit terms granted to the Group are as follows:

Group

87



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28. Other payables and contract liabilities (cont'd.)

The current and non-current portions of contract liabilities are as below:

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Current 2,510 1,699 - -Non-current 4,549 1,520 - -

7,059 3,219 - -

(a) Payables

Type of transaction 2019 2018RM'000 RM'000

Securexpress Services Sdn. Bhd. Transportation costs 542 1,377

(b) Refundable deposits

(c) Due to a subsidiary company

(d) Contract liabilities

Payables, other than amounts due to a subsidiary company, are unsecured, non-interestbearing and are normally settled on 30 to 60 (2018: 30 to 60) days terms. They arerecognised at their original invoice amounts which represent their fair values on initialrecognition.

Group

Contract liabilities comprised deferred revenue from initial franchise fees and loyaltypoints not yet redeemed.

Included in sundry payables are balances in respect of transactions with a company inwhich TSVT is deemed interested:

Refundable deposits comprised security deposits, change fund deposits and rentaldeposits. These deposits are refundable upon the termination by notice as per thefranchise or tenancy agreements, or the expiration of the respective agreement.

As at 31 December 2019, the amount due to a subsidiary company, refers to amountdue to 7-Eleven Malaysia Sdn. Bhd. This amount is unsecured, bore interest at 5.8%(2018: 5.8%) per annum and is repayable on demand.

Group Company

88



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29. Dividends

Net Netdividend dividend

per perAmount, ordinary Amount, ordinary

net of tax share net of tax shareRM'000 Sen RM'000 Sen

Dividend for the financial year ended 31 December 2018

Interim single-tier cash dividend of 2.4% on 1,128,890,823# ordinary shares, declared on 19 April 2019 and paid on 23 May 2019 27,093 2.4 - -

Share dividend via distribution of 21,299,101 treasury shares on the basis of 1 treasury share for every 53 existing ordinary shares# held , declared on 19 April 2019 and credited on 23 May 2019 33,013 2.9 - -

Dividend for the financial year ended 31 December 2017

Interim single-tier cash dividend of 2.7% on 1,110,385,000^ ordinary shares, declared on 18 April 2017 and paid on 24 May 2018 - - 29,980 2.7

Share dividend via distribution of 18,505,823 treasury shares on the basis of 1 treasury share for every 60 existing ordinary shares# held , declared on 18 April 2018 and credited on 24 May 2018 - - 28,684 2.6

60,106 5.3 58,664 5.3

#

^

Group and Company2019 2018

Dividends were distributed to the holders of ordinary shares of the Company in issue asat 10 May 2019 (being the entitlement date), net of 104,494,000 treasury shares.

Dividends were distributed to the holders of ordinary shares of the Company in issue asat 14 April 2018 (being the entitlement date), net of 123,000,000 treasury shares.

89



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29. Dividends (cont'd.)

Netdividend

perAmount, net ordinary

of tax shareRM'000 sen

Interim single-tier dividend of 2.3% on ordinary shares^ 26,454 2.3

^ Number of shares is net of 83,195,000 treasury shares.

30. Significant related party transactions

(a) Significant related party transactions

2019 2018 Type of transaction RM'000 RM'000

With a subsidiarycompany

Held by theCompany:

7-Eleven Malaysia Dividend receivable from 7EMSB 10,000 61,000 Sdn. Bhd. ("7EMSB") Net advances to 7EMSB 33,914 3,021

Interest expense payable to 7EMSB 3,642 4,436

Company

The following dividend have been declared on 22 April 2020, for the financial year ended 31December 2019:

Group and Company

The entitlement date has been fixed on 13 May 2020. The cash dividend is payable on 28May 2020 and will be credited into the entitled depositors' securities accounts maintainedwith Bursa Malaysia Depository Sdn Bhd within 10 market days from the entitlement date.

These dividends will be accounted for in the equity as an approporiation of retained profitsin the financial year ending 31 December 2020.

The Board of Directors do not propose any final dividend for the financial year ended 31December 2019.

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30. Significant related party transactions (cont'd.)

(a) Significant related party transactions (cont'd.)


With companiesin which TSVTis deemedinterested*

MOL AccessPortal Commission income from MOL for Sdn. Bhd. in-store services such as reloads of

("MOL") mobile phone, Touch 'n Go, andonline game and bill payments@ - 9,981

Transaction values for MOL'sin-store services such as reloads ofmobile phone, Touch 'n Go, andonline game and bill payments@ - 667,748

U Mobile Sdn. Bhd. Commission income from U Mobile("U Mobile") on sale of mobile phone reloads 12,793 12,707

Transaction values for U Mobile's in-store services for sale of mobile phone reloads 235,742 202,214

Advertisement placement fees from U Mobile 10,194 7,512

Berjaya Channel Advertisement placement fees Sdn. Bhd. from BCSB - 42

("BCSB")

Sun Media Advertising fees on placement of Corporation advertisement in The Sun Sdn. Bhd. newspaper 824 943

Display fees from placement of The Sun newspaper in 7-Eleven's stores 720 720

@ Disclosure for related party transactions from 1 January 2018 to10 May 2018. MOL ceased being a related party after 10 May2018.

Company

91



201301028701 (1058531-W)



(a) Significant related party transactions (cont'd.)


With companiesin which TSVTis deemedinterested*(cont'd.)

Securexpress Transportation fees to Securexpress Services Sdn. Bhd. on delivery of merchandise goods ("Securexpress") to stores 10,166 9,832

Berjaya Sompo Insurance premium fee to Insurance Berhad Berjaya Sompo

("Berjaya Sompo") 1,275 1,743

Berjaya Food Purchase of beverages from B FoodTrading Sdn Bhd("B Food") 3,526 -

Nural Enterprise Rental of property of NESB Sdn. Bhd.

("NESB") 1,297 1,327

Berjaya Times Rental of property of BTSB Square Sdn. Bhd.

("BTSB") 749 670

* TSVT is a substantial shareholder of the Company.

Information regarding outstanding balances arising from related party transactions as at31 December 2019 and 2018 are disclosed in Notes 15, 27 and 28.

The Directors are of the opinion that all the transactions above have been entered intoin the normal course of business and have been established on negotiated terms andconditions.

Group

92



201301028701 (1058531-W)



(b) Compensation of key management personnel

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Short-term employee benefits 8,345 6,091 499 432Post-employment benefits: Defined contribution plan 853 629 - -

9,198 6,720 499 432

Included in the total key management personnel are:

Directors' benefits (Note 6(b)) 4,595 3,589 499 432

31. Commitments

(a) Capital commitments

2019 2018RM'000 RM'000

Property, plant and equipment - approved and contracted for 13,913 7,265 - approved but not contracted for 115,697 99,749

129,610 107,014

Group

Group

Company

The remuneration of directors and members of key management during the financialyear was as follows:

93



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31. Commitments (cont'd.)

(b) Operating lease commitments - as lessor

2019 2018RM'000 RM'000

Not later than 1 year 160 120Later than 1 year but not later than 5 years 49 85

209 205

32. Contingent liabilities

(a) Bank guarantee

(b) Material litigation

(i) E-Apaci Sdn Bhd (“EASB”)

The future minimum rentals receivable under non-cancellable operating leases at thereporting date are as follows:

Group

The Group has entered into commercial property leases on their properties. These non-cancellable leases have an average lease terms of 3 years. All leases include a clauseto enable upward revision of the rental charge upon renewal of the leases based onprevailing market conditions.

The Group has bank guarantees of RM8,879,111 as at 31 December 2019 (2018:RM7,344,318) as security deposits in favour of various government bodies and privatecompanies.

The bank guarantee facilities are granted to 7-Eleven Malaysia Sdn. Bhd. on a cleanbasis.

On 29 November 2019, E-Apaci Sdn Bhd (“EAP”) filed a claim against 7-ElevenMalaysia Sdn. Bhd. ("7EMSB"), a wholly owned subsidiary of the Company, forspecific performance to execute the energy saving contract and loss and damagesfor an alleged breach of contract and/or loss of contract amounting toRM8,785,720 and RM1,343,817, respectively. 7EMSB has filed its Defence in theCourt on 8 January 2020 and case management of the matter is fixed on 21 May2020 for parties to comply with pre-trial directions. As at reporting date, the trialdates for the above matter is fixed on 3 May 2021 to 5 May 2021 and thus, theoutcome cannot be determined at this juncture. The Directors’ of 7EMSB are ofthe opinion that as there is a fair chance of succeeding in their defense over thedisputed claim. Accordingly, no provision for any liability has been made in thefinancial statements.

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32. Contingent liabilities (cont'd.)

(b) Material litigation (cont'd.)

(ii) Purnama Resources (M) Sdn Bhd (“Purnama”)

33. Fair value of financial instruments

A.

Carrying Fair Carrying Fairamount value amount value

Financial liabilities:- Lease liabilities (Note 10 (b)) 607,112 607,154 - -- Hire purchase and finance lease liabilities (Note 25) - - 298 336

RM'000 RM'0002018

Group2019

Fair value of financial instruments by classes that are not carried at fair value andwhose carrying amounts are not reasonable approximation of fair value

On 24 September 2019, Purnama Resources (M) Sdn Bhd (“Purnama”) filed aclaim for loss and damages against 7EMSB for a purported wrongful termination ofcontract amounting to RM1,913,194. On 11 November 2019, Purnama obtained aJudgement in Default (“JID”) against the Company. On 17 January 2020, theCompany applied to set aside the JID and for leave to defend against the claim. Acase management is fixed on 13 April 2020 for parties to furnish hardcopies ofwritten submission to court and to fix a hearing date. On 21 January 2020, 7EMSBfiled an Originating Summons along with a Notice of Application (Ex-Parte) seekingfor a Fortuna Injunction to restrain Purnama from, amongst others, presenting awinding-up petition. On 24 January 2020, the Court granted the Company with theFortuna Injunction Order on an ex-parte basis. On 14 February 2020, by consent,7EMSB obtained the Injunction Order sought under the Originating Summons.Accordingly, the outcome cannot be determined as at the reporting date. TheDirectors’ of 7EMSB are of the opinion that as there is a fair chance of succeedingin their defense over the disputed claim and thus, no provision for any liability hasbeen made in the financial statements.

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33. Fair value of financial instruments (cont'd.)

B. Determination of fair value

Note

Sundry receivables (current) 15Trade and other payables (current) 27, 28Borrowings (current and non-current) 24

The carrying amounts of these financial assets and liabilities are reasonableapproximation of fair values, either due to their short-term nature or that they arefloating rate instruments that are re-priced to market interest rates on or near thereporting date.

The carrying amounts of the current and non-current portion of borrowings arereasonable approximation of fair values due to the insignificant impact of discounting.

The fair values of current and non-current borrowings are estimated by discountingexpected future cash flows at market incremental lending rate for similar types oflending, borrowings or leasing arrangements at the reporting date.

The following are classes of financial instruments that are not carried at fair value andwhose carrying amounts are reasonable approximation of fair value:

Financial instruments that are not carried at fair value and whose carrying amounts arereasonable approximation of fair value

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C. Fair value hierarchy

Quantitative disclosures fair value measurement hierarchy for assets and liabilities:

Quoted Significantprices in Significant un-

active observable observablemarkets inputs inputs

Total (Level 1) (Level 2) (Level 3)RM'000 RM'000 RM'000 RM'000

Group

31 December 2019

Assets carried at fair value:Land and buildings

classified as property,plant and equipment(Note 9(d)) 68,289 - - 68,289

Land and buildingsclassified as right-of-useassets (Note 10(a)) 12,850 - - 12,850

Investment propertyclassified as right-of-useassets (Note 10(a)) 400 - - 400

Other investment (Note 14) 28,000 27,999 - 1

Liabilities for which fair values are disclosed- Lease liabilities (Note 33.A) - - - -

The following table provides the fair value measurement hierarchy of the Group'sassets and liabilities.

Fair value measurement using

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C. Fair value hierarchy (cont'd.)

Quoted Significantprices in Significant un-

active observable observablemarkets inputs inputs

Total (Level 1) (Level 2) (Level 3)RM'000 RM'000 RM'000 RM'000

Group

31 December 2018

Assets carried at fair value:Land and buildings

classified as property,plant and equipment(Note 9) 80,679 - - 80,679

Investment property (Note 11) 400 - - 400Other investment (Note 14) 1 - - 1

Liabilities for which fair values are disclosedBorrowings- Hire purchase and finance lease liabilities (Note 33.A) 336 - - 336

There have been no transfers between Level 1 and Level 2 during the year.

34. Financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from their operationsand the use of financial instruments. The key financial risks include credit risk, interest raterisk, liquidity risk and foreign currency risk.

The Board of Directors reviews and agrees the policies and procedures for themanagement of these risks, in order to minimise the effects of the unpredictability of thefinancial markets on the performance of the Group and of the Company, which areexecuted by the senior management of the Company.

Fair value measurement using

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34. Financial risk management objectives and policies (cont'd.)

(a) Credit risk

Exposure to credit risk

Amounts due from related companies and other related parties

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group's andthe Company's financial instruments will fluctuate because of changes in marketinterest rates.

The interest bearing assets made up of deposits with licensed banks. The Group andthe Company manage the interest rate risk of their deposits with licensed banks byplacing them at the most competitive interest rates obtainable, which yield betterreturns than cash at bank.

Borrowings at floating rates expose the Group and the Company to cash flow interestrate risk. Borrowings obtained at fixed rate expose the Group and the Company to fairvalue interest rate risk. The Group and the Company manage their interest rateexposure by maintaining a mix of fixed and floating rate borrowings.

The following sections provide details regarding the Group's and the Company's exposureto the above-mentioned financial risks and the objectives, policies and processes for themanagement of these risks.

It is the Group's policy that no derivatives shall be undertaken except for the use as hedginginstruments where appropriate and cost-efficient. The Group and the Company do not applyhedge accounting.

Credit risk is the risk of loss that may arise on outstanding financial instruments shoulda counterparty default on its obligations. The Group's and the Company's exposure tocredit risk arises primarily from sundry receivables. For other financial assets (includingcash and bank balances), the Group and the Company minimise credit risk by dealingexclusively with high credit rating counterparties.

At the reporting date, the Group's and the Company's maximum exposure to credit riskis represented by the carrying amount of each class of financial assets recognised inthe statements of financial position.

The Group's objective is to seek continual growth while minimising losses incurred dueto increased credit risk exposure. Receivable balances are monitored on an ongoingbasis.

There is minimal risk of default as these related companies holds substantial amountof properties; while the other related parties are prospectively profitable. The creditstanding of these related companies are periodically monitored and reviewed.

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(b) Interest rate risk (cont'd.)

Sensitivity analysis for interest rate risk

Range ofinterest Within 1 - 2 2 - 5

Note rate 1 year years years Total% RM'000 RM'000 RM'000 RM'000

At 31 December 2019

Group

Fixed rateHire purchase and finance lease 25 3.5 - 6.3 98 80 133 311

Variable rateLease liabilities 10 5.8 76,592 74,424 456,096 607,112Bankers' acceptances 24 4.4 - 4.7 45,000 - - 45,000Term loans 24 5.6 - 5.9 19,200 19,200 6,000 44,400Revolving credit 24 4.8 - 5.0 60,000 - - 60,000

At 31 December 2018

Fixed rateHire purchase and finance lease 25 3.5 - 6.3 87 188 23 298

Variable rateBankers' acceptances 24 4.7 - 5.6 51,145 - - 51,145Term loans 24 5.7 - 6.3 16,071 19,200 25,200 60,471Revolving credit 24 5.3 - 5.7 60,000 - - 60,000

At the reporting date, if interest rates had been 50 basis points higher/lower, with allother variables held constant, the Company's profit net of tax would have beenRM204,000 (2018: RM323,000) lower/higher, arising mainly as a result of higher/lowerinterest income on deposit with licensed banks and amount due from a subsidiarycompany.

The assumed movement in basis points for interest rate sensitivity analysis is based onthe currently observable market environment.

The carrying amounts, the range of applicable interest rates as at the reporting date andthe remaining maturities of the Group’s financial instruments that are exposed to interestrate risk are disclosed in Notes 10, 24 and 25 and the table below:

At the reporting date, if interest rates had been 50 basis points higher/lower, with allother variables held constant, the Group's profit net of tax would have beenRM2,687,000 (2018: RM587,000) lower/higher, arising mainly as a result of higher/lowerinterest income on deposits with licensed banks and interest expenses on borrowings.

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(c) Liquidity risk

Analysis of financial instruments by remaining contractual maturities

On demandor within 1 to 5

1 year years TotalRM'000 RM'000 RM'000

Group

Financial liabilities:Lease liabilities 109,879 674,642 784,521Trade and other payables 532,708 - 532,708Borrowings 126,201 26,159 152,360Total undiscounted financial liabilities 768,788 700,801 1,469,589

Company

Financial liabilities:

Trade and other payables, representing total undiscounted financial liabilities 47,305 - 47,305

The table below summarises the maturity profile of the Group's and the Company'sliabilities at the reporting date based on contractual undiscounted repaymentobligations.

Liquidity risk is the risk that the Group or the Company will encounter difficulty inmeeting financial obligations due to shortage of funds. The Group's and theCompany's exposure to liquidity risk arises primarily from mismatches of the maturitiesof financial assets and liabilities. The Group's and the Company's objective is tomaintain a balance between continuity of funding and flexibility through the use ofstand-by credit facilities.

The Group actively manages its operating cash flows and the availability of funding soas to ensure that all funding needs are met. As part of its overall prudent liquiditymanagement, the Group maintains the availability of funding through adequate amountof committed credit facilities.

2019

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(c) Liquidity risk (cont'd.)

Analysis of financial instruments by remaining contractual maturities (cont'd.)

On demandor within 1 to 5

1 year years TotalRM'000 RM'000 RM'000

Group


Trade and other payables 452,849 - 452,849Borrowings 133,843 51,471 185,314Total undiscounted financial liabilities 586,692 51,471 638,163

Company


Trade and other payables, representing total undiscounted financial liabilities 89,933 - 89,933

(d) Foreign currency risk

2019 2018RM'000 RM'000

Receivables

US Dollar 22 -

Payables

US Dollar 5,729 702

The Group is exposed to foreign currency risk as a result of its normal operatingactivities, where the currency denomination differs from the functional currency, RinggitMalaysia. The currency giving rise to this risk is primarily US Dollar. Foreign exchangeexposures are kept to an acceptable level.

Group

2018

The net unhedged financial liabilities of the Group and the Company that are notdenominated in their functional currency are as follows:

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(d) Foreign currency risk (cont'd.)

Sensitivity analysis for foreign currency risk

35. Capital management

Note 2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Borrowings 24 149,400 171,914 - -Balances with a subsidiary 28 - - 44,581 84,854Less: Cash and bank balances 17 (96,207) (72,548) (1,181) (1,284)Net debt 53,193 99,366 43,400 83,570

Total capital as defined above 231,039 254,419 1,488,110 1,543,089

Gearing ratio 0.23 0.39 0.03 0.05

At the reporting date, the impact to the Group's profit net of tax would be minimal, if USDollar exchange rate had strengthened/weakened by 10%, with all other variables heldconstant.

Group

The Group manages its capital structure and makes adjustments to it, in light of changes ineconomic conditions. To maintain or adjust the capital structure, the Group may adjust thedividend payment to shareholders, return capital to shareholders or issue new shares. Nochanges were made in the objectives, policies or processes during the financial yearsended 31 December 2019 and 2018.

The primary objective of the Group's capital management is to ensure that it maintains astrong credit rating and healthy capital ratios in order to support its business and maximiseshareholders' value.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital.The Group's policy is to keep the gearing ratio of less than 1.25 times. The Group includeswithin net debt, loans and borrowings, less cash and bank balances. Capital includes equityattributable to the shareholders of the Company, and excludes treasury shares.

The gearing ratio is not governed by the MFRS and its definition and calculation may varyfrom one group/company to another.

Company

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36. Segment information

(a) Convenience stores

(b) Others

Revenue Inter-External segment TotalRM'000 RM'000 RM'000

For the financial year ended31 December 2019Convenience stores 2,360,848 - 2,360,848Others 210 697 907Inter-segment elimination - (697) (697)

2,361,058 - 2,361,058

For the financial year ended31 December 2018Convenience stores 2,216,804 - 2,216,804Others 245 61,697 61,942Inter-segment elimination - (61,697) (61,697)

2,217,049 - 2,217,049

All inter-segment transactions were carried out in the normal course of business andestablished under negotiated terms.

The convenience stores segment is the operating and franchising of conveniencestores under the "7-Eleven" brand name, which offers a range of grocery and fooditems including hot food and beverages and manages the distribution of reloads ofmobile phone, Touch 'n Go and online game and bill payment services.

The Group is essentially involved in operation of convenience stores, investment holdingand real property investments. Operating segments of the Group are best segregated asfollows:

Group

The other segments consist of investment holding and real property investments.

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36. Segment information (cont'd.)

Results2019 2018

RM'000 RM'000

Profit from operations:Convenience stores 119,727 83,276Others (325) (517)

119,402 82,759Interest income 861 1,008Finance costs (43,610) (9,908)Profit before tax 76,653 73,859Income tax expense (22,569) (22,529)Net profit for the year 54,084 51,330

Assets and liabilities

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Convenience stores 1,333,756 692,310 1,314,386 653,297Others 88,263 57,057 5,522 3,592

1,422,019 749,367 1,319,908 656,889

Other information

Depreciation Impairment OtherCapital and loss/ non-cash

expenditure amortisation written-off expensesRM'000 RM'000 RM'000 RM'000

For the financial year ended31 December 2019

Convenience stores 93,774 158,960 21,469 -

For the financial year ended31 December 2018

Convenience stores 35,452 63,843 7,570 24

All revenue and non-current assets are earned and held in Malaysia.

Group

GroupAssets Liabilities

Group

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37. Earnings per share

2019 2018

Net profit attributable to equity holders of the Company (RM'000) 54,058 51,307Weighted average number of ordinary shares in issue ('000) 1,140,875 1,121,640Basic/diluted earnings per ordinary share (sen) 4.74 4.57

38. Significant events disclosure

(a)

(b)

Group

Basic earnings per share amounts are calculated by dividing profit for the financial year (netof tax) attributable to equity holders of the Company, by the weighted average number ofordinary shares outstanding during the financial year.

The Company has no potential ordinary shares and therefore, diluted earnings per share isthe same as basic earnings per share. The following reflect the profit and share data used inthe computation of basic earnings per share for the years ended 31 December:

On 30 September 2019, 7-Eleven Malaysia Sdn Bhd (“7EMSB”), a subsidiary of 7-Eleven Malaysia Holdings Berhad (“SEM”) had entered into a Sale and PurchaseAgreement (“SPA”) with Tropicana Aman Sdn Bhd (“TASB”) for the proposedacquisition of a 2- story shop-office in Bandar Tropicana Aman, Selangor Darul Ehsan(“Property”) for a cash consideration of RM2.85 million.

Accordingly, CSSSB is obliged to extend a mandatory take-over offer to acquire all theremaining Caring Shares not already owned by CSSSB and persons acting in concertwith it at a cash offer price of RM2.60 per Caring Share (“Offer Price”) pursuant toSection 218(2) of the Capital Markets and Services Act 2007 and Paragraph 4.01(a) ofthe Rules and Take-overs, Mergers and Compulsory Acquisitions (“Rules”). On 14February 2020, RHB Investment Bank Berhad had, on behalf of CSSSB, served anotice of unconditional mandatory offer on the board of directors of Caring inaccordance with Paragraph 9.10(1) of the Rules, to acquire all the remaining CaringShares not already held by CSSSB at the Offer Price. The Offer has closed on 10 April2020. As at 24 April 2020, CSSSB owns 161,842,625 Caring Shares which represent74.34% equity interest in Caring.

The SSA has become unconditional on 14 February 2020 and the Acquisition wascompleted on 27 February 2020. Upon the completion of the Acquisition, the collectiveshareholdings of CSSSB and identified persons acting in concert with it in Caringincreased from 13.41% to 38.77%.

On 28 November 2019, Convenience Shopping (Sabah) Sdn Bhd ("CSSSB"), a wholly-owned subsidiary of 7-Eleven Malaysia Holdings Berhad had entered into a conditionalshare sale agreement (“SSA”) with Motivasi Optima Sdn Bhd for the acquisition of55,198,000 ordinary shares in Caring Pharmacy Group Berhad (“Caring”) (“CaringShares”), representing approximately 25.35% equity interest in Caring for a total cashconsideration of RM143,514,800 or RM2.60 per Caring Share (“Acquisition”).

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38. Significant events (cont'd.)

(c)

39. Comparatives

For the financial year ended 31 December 2018

Statement of comprehensive income

As previouslystated Adjustments As restated

RM'000 RM'000 RM'000

Cost of sales (1,400,333) (118,099) (1,518,432)Gross profit 816,716 (118,099) 698,617Other operating income 4,568 118,099 122,667

40. Subsequent event disclosure

The World Health Organisation had on 11 March 2020 declared COVID-19 a pandemic andthe Government of Malaysia, in its effort to contain the COVID-19 outbreak had on 16March 2020 announced a Movement Control Order (“MCO”) to be imposed effective from18 March 2020 until 31 March 2020, subsequently extended to April 28 2020. The Group’sprincipal activities involve the operation of convenience stores which are amongst the listedessential services allowed to operate during the MCO. The scale and duration of the MCOremain uncertain but could impact the Group’s earnings, cash flows and financial conditiongoing forward.

The presentation and classification in the current financial statements have been consistentwith the previous financial year except for certain incentives income comparatives whichhave been reclassed to conform with current year’s presentation.

On 27 December 2019, a subsidiary of 7-Eleven Malaysia Holdings Berhad ("SEM"),SEMSB, had entered into a subscription agreement for the subscription of 490,030new ordinary shares ("Subscription Shares") representing about 46.45% equity interestin the enlarged issued share capital of Dego Malaysia Sdn Bhd ("DEGO") (formerlyknown as Myinteractivelab Sdn Bhd) for a cash consideration of RM7,512,160. Uponthe completion of the subscription on 3 January 2020, DEGO became an associate ofSEMSB with equity interest of 46.45%.

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LIST OF PROPERTIESAS AT 31 DECEMBER 2019

No. LocationDescription of Properties ExistingUse

Estimated Age of

Building (Years)

ApproximateArea/Size

(sq ft) Tenure Date of

Acquisition Net Book Value(RM)

1 Lot3,PersiaranGerbangUtama,BukitJelutongIndustrialPark,40150ShahAlam,Selangor Darul Ehsan.

AParcelofIndustrial

Land

Vacant/NotApplicable

- 174,182 (4 acres)

Freehold 12 May 2009

34,800,000

2 No.49,JalanSultanIsmail,50250KualaLumpur.

A Commercial Land

Accommodating An Intermediate Unit 2 ½ Storey Terraced Shop

Office

Groundflooras7-ElevenConvenienceStoreandotherfloors

for rental purpose

62 Land Area :1,302

Build-up:3,750

Freehold 28May2004

5,200,000

3 No.2,JalanHangLekiu,50100KualaLumpur.

Corner Unit Four(4)StoreyShopOffice


for rental purpose

21 Land Area :1,033

Build-up:4,142

Freehold 3Oct2005

5,000,000

4 No.1,Block6,JalilLink,JalanJalilJaya7,BukitJalil,57000KualaLumpur.



for rental purpose

10 Land Area :1,787

Build-up:7,140

Freehold 25Sep2007

5,600,000

5 No.58,JalanPJS11/28A,Sunway Metro, Bandar Sunway,461500PetalingJaya,Selangor Darul Ehsan.

Intermediate UnitFour(4)Storey Shop

Office


for rental purpose

23 Land Area :1,647

Build-up:6,600

Leasehold (99-Year)

ExpiringDate:28Dec2092(H.S.(D)85458)

11Mar2095(H.S.(M)9321)

11 May 2006

4,100,000

6 No.211,JalanPerkasa1,Taman Maluri,55100KualaLumpur.



for rental purpose

36 Land Area :2,208

Build-up:8,654

Leasehold (99-Year)

6Oct2004

5,600,0007 No.213,JalanPerkasa1,

Taman Maluri,55100KualaLumpur.


Office


for rental purpose

36 Land Area :1,760

Build-up:6,864

ExpiringDate:24May2076

6Oct2004

8 No.10,JalanTiara2,Bandar Baru Klang,41150Klang,Selangor Darul Ehsan.


Office


for rental purpose

27 Land Area :1,647

Build-up:6,402

Leasehold (99-Year)


24 Aug 2004

1,650,000

9 LotNo.G-17&G18,GroundFloor,WismaCosway,Jalan Raja Chulan,50200KualaLumpur.

Two (2) adjoining

GroundFloorstrata Shop Lot

As7-ElevenConvenience Store

36 Land Area :-

Build-up:602.78

Freehold 30Sep2009

1,500,000

10 No.46,JalanPermas10,BandarBaruPermasJaya,81750Masai,JohorDarulTakzim.



for rental purpose

24 Land Area :2,583

Build-up:10,332

Freehold 9Dec2008

2,300,000



No. LocationDescription of Properties ExistingUse

Estimated Age of

Building (Years)


(sq ft) Tenure Date of

Acquisition Net Book Value(RM)

11 No. 2, Jalan Impian Mahkota 1,Taman Saujana Impian,43000Kajang,Selangor Darul Ehsan.

Intermediate UnitThree(3)Storey Shop

Office

LowerGroundFloorused as car park and otherfloorsforrental

purpose

12 Land Area :1,604

Build-up:5,003

Freehold 25Jan2006

1,450,000

12 No.20,JalanTunAbdulRazak,Susur6,TamanSuriaMuafakat,80200JohorBahru,JohorDarulTakzim.

Intermediate StratifiedUnit

Three(3) Storey Shop

Office


for rental purpose

9 Land Area :1,701

Build-up:4,620

Leasehold (99-Year)


11 Dec 2008

1,500,000

13 No. 1, Lorong Sungai Emas,Eden Square,BatuFerringhi,11100PulauPinang.

Corner Unit Three(3)StoreyShopOffice


for rental purpose

16 Land Area :1,604

Build-up:4,516

Freehold 16May1997

1,350,000

14 No.65,JalanBadik1,Taman Sri Tebrau,80050JohorBahru,JohorDarulTakzim.

Intermediate Unit Two (2)

Storey Terraced ShopOffice


for rental purpose

43 Land Area :1,760

Build-up:2,916

Freehold 27Apr2006

1,500,000

15 No.7,JalanSS12/1B,Subang Jaya,47500PetalingJaya,Selangor Darul Ehsan.

Intermediate Unit Two (2) Storey Shop

Office


for rental purpose

29 Land Area :1,324

Build-up:2,408

Freehold 22 Jan1998

2,100,000

16 No.A-G-08,BlockA,JalanPJU1A/41B,Diaman Crimson(PusatDaganganNZX),47301PetalingJaya,Selangor Darul Ehsan.

Intermediate Unit Ground FloorShop


12 Land Area :-

Build-up:1,711

Freehold 10Mar2005

1,250,000

17 No.30,JalanSetiaTropika1/24,Taman Setia Tropika, Kempas,81200JohorBahru,JohorDarulTakzim.

End Unit Three(3)StoreyShopOffice


for rental purpose

11 Land Area :1,680

Build-up:5,040

Freehold 25Mar2008

1,900,000

18 No.1,JalanKesidang3/11,Melaka Mall,OffJalanTunPerak,75300Melaka.

EndUnitFour(4) Storey Shop

Office


for rental purpose

27 Land Area :2,271

Build-up:7,928

Freehold 25Aug2007

850,000

19 No.47,JalanYangKalsom,30250Ipoh,PerakDarulRidzuan.


Office


for rental purpose

70 Land Area :1,740

Build-up:3,040

Freehold 15Jun2007

700,000

20 No.D-0-5&D-0-6,BlockD,GroundFloor,Arena Green Apartment,Jalan1/155A,BukitJalil,57000KualaLumpur.

Two (2) adjoining

GroundFloorstrata Shop Lot


17 Land Area :-

Build-up:1,378

Freehold 14 April 2009

690,000



No. LocationDescription ofProperties ExistingUse

EstimatedAge of

Building(Years)


(sq ft) TenureDate of

Acquisition Net BookValue(RM)

21 No.31,JalanUtama44,Mutiara Square, Mutiara Rini,81300Skudai,JohorBahru,JohorDarulTakzim.


Office


for rental purpose

12 Land Area :1,647

Build-up:3,124

Leasehold (991-Year)

ExpiringDate:4Sep2911

14 May 2009

720,000

22 19,JalanSungai DamansaraB32/B,BerjayaPark,Seksyen32,40460ShahAlam,Selangor Darul Ehsan.

Corner Unit Single Storey

Shop


14 Land Area :1,647

Build-up:1,640

Freehold 17Aug2007

470,000

23 No47,JalanTTJS/A,Taman Tuanku Jaafar,71450Seremban,Negeri Sembilan Darul Khusus.

Corner Unit Two (2) Storey ShopOffice


for rental purpose

20 Land Area :1,991

Build-up:3,851

Freehold 22 Apr 1996

550,000

24 No 422, Jalan Cenderawasih 2,TamanParoiJaya,70400Seremban,Negeri Sembilan Darul Khusus.


Office


for rental purpose

36 Land Area :1,755

Build-up:3,515

Freehold 29Sep2008

360,000

25 No155,JalanBandarSenawang8,PusatBandarSenawang,70450Seremban,Negeri Sembilan Darul Khusus.


Office

Forrentalpurpose 17 Land Area :1,399

Build-up:2,800

Leasehold (99-Year)

ExpiringDate:4Dec2088

21 Jun 1997

400,000


ADDITIONAL COMPLIANCE INFORMATION

1. Audit and Non-Audit Fees

Theamountsofauditandnon-auditfeespaidtotheExternalAuditorsorafirmaffiliatedtotheExternalAuditorsbytheCompanyandtheGroupforthefinancialyearended31December2019areasfollows:-

Group(RM)

Company(RM)

Audit 506,000 86,000Non-Audit 68,000 13,000

2. Material Contracts

Saveasdisclosedbelow,neither7-ElevenMalaysiaHoldingsBerhadnoranyof itssubsidiarycompanieshaveenteredinto any contract which is or may be material (not being contracts entered into in the ordinary course of business of the Companyoranyofitssubsidiarycompanies)forthefinancialyearended31December2019:

(a) Asharesaleagreementdated28November2019enteredintobetweenConvenienceShopping(Sabah)SdnBhd,awholly-ownedsubsidiaryof7-ElevenHoldings,andMotivasiOptimaSdnBhdfortheacquisitionof55,198,000ordinarysharesinCaringPharmacyGroupBerhad(“Caring”),representingapproximately25.35%equityinterestinCaringforatotalcashconsiderationofRM143,514,800.Thesaidacquisitionwascompletedon27February2020.

(b) Asubscriptionagreementdated27December2019enteredintobetween7-Eleven,awholly-ownedsubsidiaryof7-ElevenHoldings,andMyinteractivelabSdnBhd(“MSB”)forthesubscriptionof490,030newordinarysharesrepresentingabout46.45%equityinterestintheenlargedissuedsharecapitalofMSBforacashconsiderationofRM7,512,160.Thesaidsubscriptionwascompletedon3January2020.

3. Recurrent Related Party Transactions

At theAGMheldon29May2019, theCompanyhasobtainedshareholder’smandate toallow theCompanyand itssubsidiariestoenterintorecurrentrelatedpartytransactionsofarevenueortradingnature("RRPTMandate")whicharenecessaryfortheday-to-dayoperationsoftheGroupandintheordinarycourseofbusiness,withrelatedparties.

TheRRPTMandateisvaliduntiltheconclusionoftheforthcomingSeventhAnnualGeneralMeetingoftheCompanytobeheldon24June2020.TheCompanyproposestoseekrenewaloftheexistingandnewRRPTMandateatitsforthcomingSeventhAnnualGeneralMeeting.TherenewaloftheexistingandnewRRPTMandate,ifapprovedbytheshareholders,willbevaliduntiltheconclusionoftheCompany’snextAnnualGeneralMeeting.DetailsoftheRRPTMandatebeingsoughtisprovidedintheCircular/StatementtoShareholdersdated22May2020senttogetherwiththisAnnualReport.

Pursuanttoparagraph10.09(2)(b)andparagraph3.1.5ofPracticeNote12oftheMainMarketListingRequirementsofBursa Malaysia Securities Berhad, details of the recurrent related party transactions of a revenue or trading nature entered intoduringthefinancialyearended31December2019bytheCompanyandGroupareasfollows:-

Related Party Nature of TransactionValue of Transaction

RM’000

U Mobile Sdn Bhd Transaction value paid 235,742U Mobile Sdn Bhd Commissionfromin-storeservices 12,793U Mobile Sdn Bhd Advertisement placement fees 10,194SecurexpressServicesSdnBhd Transportation services for delivery of

merchandiseto7-Elevenstores10,166

BerjayaFoodTradingSdnBhd Purchaseofgoods 3,526Nural Enterprise Sdn Bhd Rental of properties 1,297Sun Media Corporation Sdn Bhd Advertisement placement fees 824Sun Media Corporation Sdn Bhd Display incentives received 720


ADDITIONAL COMPLIANCE INFORMATION

3. Recurrent Related Party Transactions (cont’d)

Pursuanttoparagraph10.09(2)(b)andparagraph3.1.5ofPracticeNote12oftheMainMarketListingRequirementsofBursa Malaysia Securities Berhad, details of the recurrent related party transactions of a revenue or trading nature entered intoduringthefinancialyearended31December2019bytheCompanyandGroupareasfollows:-(cont’d)

Related Party Nature of TransactionValue of Transaction

RM’000Berjaya Times Square Sdn Bhd Rental of properties 749AnsaHotelSdnBhd Rental of property 460SparklingHallmarkSdnBhd Rental of properties 309Angsana Gemilang Sdn Bhd Rental of property 294CempakaPropertiesSdnBhd Rental of property 265WangsaTetapSdnBhd Rental of property 125TRECHoldingsSdnBhd Rental of property 90Berjaya Sompo Insurance Berhad Rental of property 56

Qinetics Services Sdn Bhd PurchaseofITinfrastructureandmanagementservices fees

50

BLoyalty Sdn Bhd Loyalty reward fees 37BerjayaWaterfrontSdnBhd Rental of property 32Berjaya Golf Resort Berhad Rental of property 25BTS Carpark Sdn Bhd Parkingfees 17Berjaya Registration Services

Sdn BhdShare Registration and related services 15

EVAManagementSdnBhd Humanresourcesmanagementservices 6

These transactions are based on normal commercial terms that are not more favourable to its related parties than those generally available to the public.

4. Status of Utilization of Proceeds

Therewerenoproceedsraisedfromcorporateproposalsduringthefinancialyear.


STATISTICS OF SHAREHOLDINGSAS AT 30 APRIL 2020

TotalNumberofIssuedShares : 1,150,189,924(excludingtreasurysharesof83,195,076)Class of Shares : Ordinary shares VotingRights : Onevoteperordinaryshare

ANALYSIS OF SHAREHOLDINGS

Size of ShareholdingsNo. of

Shareholders %No. of Shares

Held %

Lessthan100 279 17.50 7,842 0.00100–1,000 245 15.38 72,712 0.011,001–10,000 704 44.19 2,365,915 0.2110,001–100,000 249 15.63 5,849,039 0.51100,001–57,509,495 113 7.09 555,235,309 48.2757,509,496andabove 3 0.19 586,659,107 51.01

TOTAL 1,593 100.00 1,150,189,924 100.00

SUBSTANTIAL SHAREHOLDERS

Thesubstantialshareholdersof7-ElevenMalaysiaHoldingsBerhadbasedon theRegisterofSubstantialShareholdersof theCompanyandtheirrespectiveshareholdingsasat30April2020areasfollows:-

Substantial Shareholders Direct % Indirect %

TanSriDato’SeriVincentTanCheeYioun 295,170,000 25.66 248,771,740(1) 21.63Classic Union Group Ltd. 210,396,226 18.29 - -True Ascend Sdn. Bhd. 121,132,160 10.53 - -TanSriKongHonKong 61,454,716 5.34 - -Tsai,Tzung-Han - - 210,396,226(2) 18.29Tsai,Hong-Tu 210,396,226(2) 18.29

Note:

(1) Deemed interested by virtue of his interests in the following companies:- • HQZ,theultimateholdingcompanyofBerjayaRetailSdn.Bhd.andBerjayaCreditSdn.Bhd.; • BerjayaCorporationBerhad,theultimateholdingcompanyofBerjayaLandBerhad,BerjayaPhilippinesInc.,Bukit

Kiara Resort Berhad, KDE Recreation Berhad, Country Farms Sdn Bhd, Nural Enterprise Sdn Bhd, Inter-Pacific Asset ManagementSdnBhd,RedtoneInternationalBerhadandWangsaTegapSdnBhd;

• BerjayaAssetsBerhad,theholdingcompanyofBerjayaBrightSdn.Bhd.; • TrueAscendSdn.Bhd.; • UTelemediaSdn.Bhd.and • HotelResortEnterpriseSdn.Bhd.(2) DeemedinterestedbyvirtueofhisinterestinClassicUnionGroupLtd.



DIRECTORS’ INTERESTS

TheDirectors’interestsbasedontheRegisterofDirectors’ShareholdingsoftheCompanyasat30April2020areasfollows:-


Direct Interest Indirect Interest

DirectorsNo. of

Shares Held %No. of

Shares Held %

TanSriDato’SeriAbdullHamidBinEmbong - - - -Chan Kien Sing 103,584 0.01 - -ColinGeorgeHarvey - - - -MuhammadLukmanBinMusa@Hussain 105,301 0.01 - -PuanSriDatukSeriRohaniParkashBintiAbdullah - - - -Shalet Marian 207,169 0.02 - -TanU-Ming 621,509 0.05 - -TanWaiFoon 103,584 0.01 - -Tsai,Tzung-Han - - 210,396,226(1) 18.30

Notes:-

(1) DeemedinterestedbyvirtueofhisinterestsinClassicUnionGroupLtd.

LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 30 APRIL 2020(without aggregating the securities from different securities accounts belonging to the same registered holder)

No. Name of Shareholders No. of Shareholding

% of Issued Capital

1. AMSEC Nominees (Tempatan) Sdn Bhd Pledged Securities Account - AmBank (M) Berhad For Vincent Tan Chee Yioun

254,676,000 22.14

2. HSBC Nominees (Asing) Sdn. Bhd. Exempt An For JPMorgan Chase Bank, National Association (SINGAPOREJPMPB)

210,850,947 18.33

3. Amanahraya Trustees Berhad As Beneficial Owner (TASB-T1)

121,132,160 10.53

4. DYMM Sultan Ibrahim Johor 51,122,886 4.44

5. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB Bank For Lim Wee Chai (PBCL-0G0025)

44,304,619 3.85

6. AMSEC Nominees (Tempatan) Sdn Bhd Fulcrum Capital Sdn Bhd For Kong Hon Kong

43,100,000 3.75

7. CIMB Group Nominees (Asing) Sdn. Bhd. Exempt An For DBS Bank Ltd (SFS)

38,434,129 3.34

8. JF Apex Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Berjaya Bright Sdn Bhd (Margin)

21,975,384 1.91

9. HSBC Nominees (Asing) Sdn. Bhd. TNTC For The Genesis Group Trust For Employee Benefit Plans

19,430,750 1.69

10. Tan Sri Kong Hon Kong 18,354,716 1.60



LIST OF THIRTY (30) LARGEST SHAREHOLDERS (CONT'D) AS AT 30 APRIL 2020(Without aggregating the securities from different securities accounts belonging to the same registered holder)

No. Name of Shareholders No. of Shareholding

% of Issued Capital

11. Inter-Pacific Equity Nominees (Asing) Sdn. Bhd. Berjaya Philippines Inc

16,699,975 1.45

12. Citigroup Nominees (Tempatan) Sdn. Bhd. Employees Provident Fund Board (Affin-HWG)

14,410,492 1.25

13. MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Berjaya Bright Sdn. Bhd. (MGN-SCS0007M)

14,407,541 1.25

14. HSBC Nominees (Asing) Sdn. Bhd. JPMBL SA For Stichting Depositary APG Emerging Markets Equity Pool

13,879,254 1.20

15. Casi Management Sdn. Bhd. 13,776,791 1.20

16. HSBC Nominees (Asing) Sdn. Bhd. BBH(LUX)SCAForTheGenesisEmergingMarketsInvestmentCompany

13,739,241 1.19

17. HSBC Nominees (Asing) Sdn. Bhd. Banque De Luxembourg For BL-Emerging Markets

11,651,954 1.01

18. RHB Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Vincent Tan Chee Yioun

11,067,535 0.96

19. Berjaya Land Berhad 10,766,982 0.94

20. Maybank Securities Nominees (Tempatan) Sdn. Bhd. Malayan Banking Berhad For Berjaya Retail Berhad

10,203,112 0.89

21. DB (Malaysia) Nominee (Asing) Sdn. Bhd. Deutsche Bank AG London For Doric Asia Pacific Small Cap Fund

10,094,207 0.89

22. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB Bank for Vincent Tan Chee Yioun (PBCL-0G0361)

8,871,292 0.77

23. Scotia Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Berjaya Retail Berhad

8,753,772 0.76

24. Teoh Ewe Jin 8,500,000 0.74

25. HSBC Nominees (Asing) Sdn. Bhd. JPMCB NA For Templeton Global Investment Trust- Templeton Emerging Markets Small Cap Fund

7,817,103 0.68

26. CGS-CIMB Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Vincent Tan Chee Yioun (MY3309)

7,485,001 0.65

27. CIMB Group Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Berjaya Retail Berhad (TSVT-RC CBM)

7,435,251 0.65

28. RHB Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Lim Wee Chai

7,250,942 0.63

29. CIMB Group Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Berjaya Land Berhad (BLB-RC4-Conglo)

6,733,018 0.59

30. Koon Poh Keong 6,422,263 0.56

1,033,347,317 89.84


NOTICE OF SEVENTH ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN THATtheSeventhAnnualGeneralMeetingof7-ElevenMalaysiaHoldingsBerhad("theCompany")willbeconductedvirtuallyforthepurposeofconsideringandifthoughtfit,passingwithorwithoutmodificationstheresolutionssetting out in this notice.

DayandDate :Wednesday,24June2020Time : 10.00a.m.BroadcastVenue :Level3,PodiumBlock,PlazaBerjaya,No.12,JalanImbi,55100,KualaLumpur,Malaysia : 1)TypedtextintheMeetingPlatformModeofCommunication 2)[email protected].

AGENDA

AS ORDINARY BUSINESS1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended31December2019togetherwith

theReportsoftheDirectorsandtheAuditors’thereon.[Pleaserefer

toExplanatoryNote (i)]

2. ToapprovethepaymentofDirectors’feesforanamountuptoRM574,000/-payabletotheNon-ExecutiveDirectorsof theCompanyonamonthlybasis for theperiod from25June2020until thenextAnnualGeneralMeetingoftheCompanytobeheldinyear2021.

Resolution 1

3. ToapprovethebenefitspayabletotheNon-ExecutiveDirectorsforanamountofuptoRM50,000/-fortheperiodfrom25June2020untilthenextAnnualGeneralMeetingoftheCompanytobeheldinyear2021.

Resolution 2

4. Tore-electthefollowingDirectorswhoretireinaccordancewithArticle99oftheCompany’sConstitutionandbeingeligible,haveofferedthemselvesforre-election:-(1) Shalet Marian Resolution 3(2) TanSriDato'SeriAbdullHamidBinEmbong Resolution 4(3) PuanSriDatukSeriRohaniParkashBintiAbdullah Resolution 5

5. Tore-appointMessrs.Ernst&YoungPLTastheCompany’sAuditorsfortheensuingyearandtoauthorisetheBoardofDirectorstofixtheirremuneration.

Resolution 6

AS SPECIAL BUSINESSToconsiderand,ifthoughtfit,withorwithoutanymodification,topassthefollowingOrdinaryResolutions:-6. ORDINARY RESOLUTION

- AUTHORITY TO ISSUE SHARES PURSUANT TO THE COMPANIES ACT 2016Resolution 7

“THAT,subjectalwaystotheCompaniesAct2016,theConstitutionoftheCompany,theMainMarketListing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approvals of the relevant governmental/ regulatory authorities, if applicable, the Directors be and are hereby empowered, pursuant to theCompanies Act 2016, to issue shares in the capital of theCompany at any time tosuch persons and upon such terms and conditions and for such purposes as the Directors may, in their absolutediscretiondeemfit,provided that theaggregatenumberof shares tobe issuedpursuant tothisResolutiondoesnotexceedtwentypercentum(20%)ofthetotalnumberof issuedsharesoftheCompany for the time being; AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Securities; AND FURTHER THAT such authority shall commence immediately upon passing of this Resolution and continue to be in forceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.”

7. ORDINARY RESOLUTION - PROPOSED RENEWAL OF EXISTING AND NEW SHAREHOLDERS’ MANDATE FOR

RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

Resolution 8

“THAT, subject to the provisions of the Bursa Malaysia Securities Berhad’s Main Market ListingRequirements, approval be and is hereby given for the Company and its subsidiary companies, to enter intorecurrentrelatedpartytransactionsofarevenueortradingnaturewiththerelatedpartiesasspecifiedinSection2.3of theCircular/Statement toShareholdersdated22May2020 (“Proposed Mandate”) which are necessary for the day-to-day operations and/or in the ordinary course of business of theCompany and its subsidiary companies on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company and thatsuchapprovalshallcontinuetobeinforceuntil”:-

(a) theconclusionofthenextAnnualGeneralMeeting(“AGM”) of the Company following the general meetingatwhichsuchordinaryresolutionfortheProposedMandatewaspassed,atwhichtimeitwill lapse, unless by ordinary resolution passed at that general meeting, the authority is renewed;


NOTICE OF SEVENTH ANNUAL GENERAL MEETING

(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyafterthedateitisrequiredtobeheldpursuanttoSection340(2)oftheCompaniesAct2016(“the Act”)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection340(4)oftheAct);or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting;

whichever is the earlier;

AND FURTHER THAT authority be and is hereby given to the Directors of the Company and its subsidiary companiestocompleteanddoallsuchactsandthings(includingexecutingsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttosuchtransactionsasauthorisedby this Resolution.”

8. ORDINARY RESOLUTION- PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN

SHARES

Resolution 9

“THAT,subjectalwaystotheCompaniesAct2016(“theAct”),rules,regulationsandordersmadepursuanttotheAct,provisionsoftheCompany’sConstitutionandtherequirementsofBursaMalaysiaSecuritiesBerhad (“Exchange”) and any other relevant authority, the Directors of the Company be and are hereby authorised to purchase such number of ordinary shares in the Company (“7-Eleven Holdings Shares”) throughtheExchangeandtotakeallsuchstepsasarenecessary(includingtheopeningandmaintainingofcentraldepositoriesaccountsundertheSecuritiesIndustry(CentralDepositories)Act,1991)andenterintoanyagreement,arrangementandguaranteewithanypartyorpartiestoimplement,finaliseandgivefulleffecttotheaforesaidpurchasewithfullpowerstoassenttoanycondition,modification,revaluation,variation and/or amendment (if any) as may be imposed by the relevant authorities from time to time and todoallsuchactsandthingsinthebestinterestsoftheCompany,subjectfurthertothefollowing:-

1. themaximumnumberofordinaryshareswhichmaybepurchasedandheldbytheCompanyshallbeequivalenttotenpercentum(10%)oftheexistingtotalnumberofissuedsharesintheordinaryshare capital of the Company;

2. themaximumfundstobeallocatedbytheCompanyforthepurposeofpurchasingtheordinarysharesshallnotexceedthetotalretainedprofitsoftheCompany;

3. the authority shall commence immediately upon passing of this ordinary resolution until:-

(a) theconclusionof thenextAnnualGeneralMeeting (“AGM”) of the Company following the AGM at which such resolution was passed, at which time it will lapse unless by ordinary resolution passed at that general meeting, the authority is renewed, either unconditionally or subject to conditions; or

(b) theexpirationoftheperiodwithinwhichthenextAGMafterthatdateitisrequiredbylawtobe held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting;

whicheveroccursfirst.

AND THATuponcompletionofthepurchase(s)ofthe7-ElevenHoldingsSharesoranypartthereofbytheCompany, theDirectorsof theCompanybeandareherebyauthorised todealwithany7-ElevenHoldingsSharessopurchasedbytheCompanyinthefollowingmanner:-

(a) cancelallthe7-ElevenHoldingsSharessopurchased;or

(b) retainall the7-ElevenHoldingsSharesas treasuryshares for future resaleor fordistributionasdividends to the shareholders of the Company; or

(c) retain part thereof as treasury shares and subsequently cancelling the balance; or

(d) in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act andtherequirementsoftheExchangeandanyotherrelevantauthorityforthetimebeinginforce.”


9. To transact any other business of which due notice shall have been given.

By Order of the Board

SEE SIEW CHENG (SSM PC No. 202008000996) (MAICSA 7011225)TIA HWEI PING (SSM PC No. 202008001687) (MAICSA 7057636)Company Secretaries

Selangor Darul Ehsan 22May2020

NOTES:

Proxy

1. Aspartoftheinitiativestocurbthespreadofcoronavirusdisease(Covid-19),theCompanywillconducttheSeventhAGMentirelyviaremoteparticipationandvotingfacilities(“RPV”).KindlyrefertotheattachedAdministrativeDetailsfortheSeventhAGM for more information.

2. TheonlyvenueinvolvedisthebroadcastvenueforthecompliancewithSection327(2)oftheCompaniesAct2016thattheChairmanoftheMeetingshallbepresentatthemainvenueoftheAGM.Noshareholderorproxyfromthepublicshouldbephysically present nor admitted at the broadcast venue on the day of the AGM.

3. AstheSeventhAGMwillbeconductedviaavirtualmeeting,amemberwhoisnotabletoparticipateintheAGMmayappointtheChairmanoftheMeetingashis/herproxyandindicatethevotinginstructionintheFormofProxy.

4. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson10June2020shallbe eligible to attend the Meeting.

5. AmemberentitledtoattendandvoteattheMeetingisentitledtoappointaproxyorproxiestoattendandvoteonhisbehalf.AproxymaybutneednotbeamemberoftheCompanyandamembermayappointanypersontobehisproxywithoutlimitationsavethattheproxymustbeoffullage.

6. Amembershallbeentitled toappointnotmore than two (2)proxies toattendandvoteat thesamemeeting.Whereamemberappointsmorethanone(1)proxy,heshallspecifytheproportionofhisholdingstoberepresentedbyeachproxy,failing which the appointment shall be invalid.

7. WhereamemberisanauthorisednomineeasdefinedundertheCentralDepositoriesAct,itmayappointone(1)proxyinrespect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

8. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinone(1)securitiesaccount(“Omnibus Account”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachOmnibusAccountitholds.

9. The instrumentappointingaproxyshallbe inwritingunder thehandof theappointororofhisattorneydulyauthorisedinwritingoriftheappointorisacorporationeitherunderitscommonseal,orthehandofitsofficeroritsdulyauthorisedattorney.

10. Tobevalid,thisform,dulycompletedmustbedepositedattheShareRegistrar’sofficeoftheCompany,BerjayaRegistrationServicesSdn.Bhd.atLot10-04A&10-04B,Level10,West,BerjayaTimesSquare,No.1,JalanImbi,55100KualaLumpur,WilayahPersekutuan,Malaysia.notlessthanforty-eight(48)hoursbeforethetimeforholdingthemeetingPROVIDEDTHATintheeventthemember(s)dulyexecutestheformofproxybutdoesnotnameanyproxy,suchmember(s)shallbedeemedtohaveappointedtheChairmanofthemeetingashis/herproxy,PROVIDEDALWAYSTHATtherestoftheproxyform,otherthantheparticularsoftheproxyhavebeendulycompletedbymember(s).Alternatively,theproxyformcanbeelectronicallylodgeviaTIIHOnlineathttps://tiih.online.PleaserefertotheAdministrativeGuideforfurtherinformationonsubmissionviaTIIHOnline.



Explanatory Notes on Ordinary and Special Business

(i) Item 1 of the Agenda

ThisAgendaitemismeantfordiscussiononly,astheprovisionofSection340(1)(a)oftheCompaniesAct2016doesnotrequirea formalapprovalof theshareholders for theAuditedFinancialStatements.Hence, thisAgenda item isnotputforward for voting.

(ii) Item2oftheAgenda–PaymentofDirectors’feesfortheperiodfrom25June2020untilthenextAnnualGeneralMeetingoftheCompanytobeheldinyear2021

TheproposedDirectors’benefitscomprisemeetingallowancepayabletotheNon-ExecutiveDirectors.

(iii) Item3oftheAgenda–BenefitspayabletotheNon-ExecutiveDirectors

TheproposedDirectors’benefitscomprisemeetingallowancepayabletotheNon-ExecutiveDirectors.

(iv) Item6oftheAgenda–AuthoritytoIssueSharespursuanttotheCompaniesAct2016

TheCompanywishestorenewthemandateontheauthoritytoissuesharespursuanttotheCompaniesAct2016attheSeventh Annual General Meeting of the Company (hereinafter referred to as the “General Mandate”).

TheCompanyhadbeengrantedageneralmandatebyitsshareholdersattheSixthAnnualGeneralMeetingoftheCompanyheldon29May2019(hereinafterreferredtoasthe“Previous Mandate”).

Asat thedateof thisNotice, theCompanyhasnot issuedanynewordinarysharespursuant to thePreviousMandategranted by the shareholders and hence, no proceeds were raised therefrom.

TheOrdinaryResolution7proposedunderitem6oftheAgendaseekstheshareholders’approvalofageneralmandatefor issuanceofsharesbytheCompanyunderSection76of theAct.BursaMalaysiaSecuritiesBerhadhadon16April2020announcedthatlistedissuersareallowedtoseekahighergeneralmandateunderParagraph6.03ofMainMarketListingRequirementsofnotmorethan20%ofthetotalnumberofissuedsharesforissueofnewsecurities(“20% General Mandate”),providedthatthefollowingarebeingcompliedwith:-

(a)Procureshareholders’approvalforthe20%GeneralMandateatageneralmeeting; (b) Complies with all relevant applicable legal requirements, including its Constitution or relevant constituent document.

This20%GeneralMandatemaybeutilisedbylistedissuertoissuenewsecuritiesuntil31December2021andthereafter,the10%generalmandatewillbereinstated.TheBoard,havingconsideredthecurrenteconomicclimateandfuturefinancialneeds of theGroup, is of the opinion that this 20%GeneralMandate is in the best interests of theCompany and itsshareholders.This20%GeneralMandate, ifpassed,willprovideflexibility for theCompanyandempower theDirectorstoallotandissuenewsharesspeedilyintheCompanyuptoanamountnotexceedingintotal20%ofthetotalnumberof issuedshareof theCompany tomeets its funding requirements forworkingcapitalandoperationalexpenditureandfor the purpose of the strategic development of the Group. This would eliminate any delay arising from and cost involved in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless revokedorvariedbytheCompanyatageneralmeeting,willexpireatthenextAGM.

(v) Item 7 of the Agenda – Proposed Renewal of Existing and New Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature

Theproposedresolution,ifpassed,willallowtheGrouptoenterintoRecurrentRelatedPartyTransactionsofarevenueortrading nature pursuant to the provisions of Bursa Malaysia Securities Berhad Main Market Listing Requirements.

PleaserefertotheCircular/StatementtoShareholdersdated22May2020forfurtherinformation.

(vi) Item8oftheAgenda–ProposedRenewalofAuthorityfortheCompanytopurchaseitsownshares

Theproposedresolution,ifpassed,willallowtheCompanytopurchaseitsownsharesupto10%ofthetotalissuedsharecapitaloftheCompanybyutilisingthefundsallocatedwhichshallnotbeexceedthetotalretainedprofitsoftheCompany.

PleaserefertotheCircular/StatementtoShareholdersdated22May2020forfurtherinformation.



Personal data privacy:

Bysubmittingan instrumentappointingaproxy(ies)and/or representative(s) toattend,speakandvoteat theSeventhAnnualGeneral Meeting and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of themember’spersonaldatabytheCompany(oritsagents)forthepurposeoftheprocessingandadministrationbytheCompany(or its agents) of proxies and representatives appointed for theSeventhAnnualGeneralMeeting (including any adjournmentthereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the Seventh Annual General Meeting (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personaldataofthemember’sproxy(ies)and/orrepresentative(s)totheCompany(oritsagents),thememberhasobtainedthepriorconsentofsuchproxy(ies)and/orrepresentative(s)forthecollection,useanddisclosurebytheCompany(oritsagents)ofthepersonaldataofsuchproxy(ies)and/orrepresentative(s)forthePurposes,and(iii)agreesthatthememberwillindemnifytheCompany inrespectofanypenalties, liabilities,claims,demands, lossesanddamagesasaresultof themember’sbreachofwarranty.


I/We______________________________________________________NRICNo./PassportNo./CompanyNo._________________________________________________

of___________________________________________________________________________________________________________________________________________

beingamember/membersof7-ElevenMalaysiaHoldingsBerhadherebyappointMr/Ms_________________________________________________________________

______________________________________________________NRICNo./PassportNo.__________________________________________________________________

of___________________________________________________________________________________________________________________________________________

andhim/her,Mr/Ms_________________________________________________NRICNo./PassportNo.______________________________________________________

of___________________________________________________________________________________________________________________________________________

orfailinghim/her,theChairmanoftheMeetingas*my/*ourproxytovotefor*me/*usandon*my/*ourbehalfattheSeventhAnnualGeneralMeetingoftheCompanytobeheldasafullyvirtualmeetingatbroadcastvenueatLevel3,PodiumBlock,PlazaBerjaya,No.12,JalanImbi,55100,KualaLumpur,MalaysiaonWednesday,24June2020at10.00a.m.andatanyadjournmentthereof.

TheProportionof*my/*ourholdingtoberepresentedby*my/*ourproxiesareasfollows:

Proxy1 % Proxy2 % 100%

Pleaseindicatewithan“X”inthespacesprovidedbelowonhowyouwishyourvotetobecasted.Ifnospecificdirectionastovotingisgiven,theproxyshallvoteashe/shethinksfitor,athis/herdiscretion,abstainfromvoting.

Item Agenda

1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended31December2019togetherwiththe Reports of the Directors and the Auditors thereon.

Ordinary Business Resolution For Against

2. To approve the payment of Directors’ fees for an amount of up toRM574,000/- payable to theNon-ExecutiveDirectorsoftheCompanyonamonthlybasisfortheperiodfrom25June2020untilthenextAnnualGeneralMeetingoftheCompanytobeheldinyear2021.

1

3. ToapprovethebenefitspayabletotheNon-ExecutiveDirectorsforanamountofuptoRM50,000/-fortheperiodfrom25June2020untilthenextAnnualGeneralMeetingoftheCompanytobeheldinyear2021.

2

4. Tore-electShaletMarianwhoretiresbyrotationinaccordancewithArticle99oftheCompany’sConstitutionandwhobeingeligible,offersherselfforre-election.

3

5. Tore-electTanSriDato'SeriAbdullHamidBinEmbongwhoretiresbyrotationinaccordancewithArticle99oftheCompany’sConstitutionandwhobeingeligible,offershimselfforre-election.

4

6. Tore-electPuanSriDatukSeriRohaniParkashBintiAbdullahwhoretiresbyrotationinaccordancewithArticle99oftheCompany’sConstitutionandwhobeingeligible,offersherselfforre-election.

5

7. Tore-appointMessrs.Ernst&YoungPLTastheCompany’sAuditorsfortheensuingyearandtoauthorisetheBoardofDirectorstofixtheirremuneration.

6

Special Business

8. AuthoritytoIssueSharespursuanttotheCompaniesAct2016 7

9. ProposedRenewalofExistingandNewShareholders’MandateforRecurrentRelatedPartyTransactionsof a Revenue or Trading Nature.

8

10. ProposedAuthorityforShareBuy-Back 9

Datedthisday of 2020

Signature/Common Seal of Shareholder[*Deleteifnotapplicable]

Notes:-1. Aspartoftheinitiativestocurbthespreadofcoronavirusdisease(Covid-19),theCompanywillconducttheSeventhAGMentirelyviaremoteparticipationandvotingfacilities(“RPV”).Kindlyrefertothe

attached Administrative Details for the Seventh AGM for more information.

2. TheonlyvenueinvolvedisthebroadcastvenueforthecompliancewithSection327(2)oftheCompaniesAct2016thattheChairmanoftheMeetingshallbepresentatthemainvenueoftheAGM.NoshareholderorproxyfromthepublicshouldbephysicallypresentnoradmittedatthebroadcastvenueonthedayoftheAGM.

3. AstheSeventhAGMwillbeconductedviaavirtualmeeting,amemberwhoisnotabletoparticipateintheAGMmayappointtheChairmanoftheMeetingashis/herproxyandindicatethevotinginstructionintheFormofProxy.

4. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson10June2020shallbeeligibletoattendtheMeeting.

5. AmemberentitledtoattendandvoteattheMeetingisentitledtoappointaproxyorproxiestoattendandvoteonhisbehalf.AproxymaybutneednotbeamemberoftheCompanyandamembermayappointanypersontobehisproxywithoutlimitationsavethattheproxymustbeoffullage.

6. Amembershallbeentitledtoappointnotmorethantwo(2)proxiestoattendandvoteatthesamemeeting.Whereamemberappointsmorethanone(1)proxy,heshallspecifytheproportionofhisholdingstoberepresentedbyeachproxy,failingwhichtheappointmentshallbeinvalid.

7. WhereamemberisanauthorisednomineeasdefinedundertheCentralDepositoriesAct,itmayappointone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystanding to the credit of the said securities account.

8. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinone(1)securitiesaccount(“Omnibus Account”), there is nolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachOmnibusAccountitholds.

9. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneydulyauthorisedinwritingoriftheappointorisacorporationeitherunderitscommonseal,orthehandofitsofficeroritsdulyauthorisedattorney.

10. Tobevalid,thisform,dulycompletedmustbedepositedattheShareRegistrar’sofficeoftheCompany,BerjayaRegistrationServicesSdn.Bhd.atLot10-04A&10-04B,Level10,West,BerjayaTimesSquare,No.1,JalanImbi,55100KualaLumpur,WilayahPersekutuan,Malaysia,notlessthanforty-eight(48)hoursbeforethetimeforholdingthemeetingPROVIDEDTHATintheeventthemember(s)dulyexecutestheformofproxybutdoesnotnameanyproxy,suchmember(s)shallbedeemedtohaveappointedtheChairmanofthemeetingashis/herproxy,PROVIDEDALWAYSTHATtherestoftheproxyform,otherthantheparticularsoftheproxyhavebeendulycompletedbymember(s).Alternatively,theproxyformcanbeelectronicallylodgeviaTIIHOnlineathttps://tiih.online.PleaserefertotheAdministrativeGuideforfurtherinformationonsubmissionviaTIIHOnline.

PERSONAL DATA PRIVACY

Bysubmittinganinstrumentappointingaproxy(ies)and/orrepresentative(s),thememberacceptsandagreestothepersonaldataprivacytermssetoutintheNoticeoftheSeventhAGMdated22May2020

Form of Proxy

7-ELEVEN MALAYSIA HOLDINGS BERHAD[Registration No. 201301028701 (1058531-W)](Incorporated in Malaysia)

CDS Account No.


7-ELEVEN MALAYSIA HOLDINGS BERHADRegistration No. 201301028701 (1058531-W)

c/o Berjaya Registration Services Sdn. Bhd.RegistrationNo.199401008064(293743-X)

Lot10-04A&10-04B,Level10,West,Berjaya Times Square, No.1 Jalan Imbi,

55100KualaLumpur,WilayahPersekutuan,Malaysia

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7-Eleven M

alaysia Ho

lding

s Berhad

201301028701 (1058531-W) annual rep

ort 2019

ar-2019.pdf - 7-Eleven Malaysia

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